Whitehorse, Yukon
Monday, April 24, 1989 - 1:30 p.m.
Speaker: I will now call the House to order. At this time, we will proceed with Prayers.
Prayers
DAILY ROUTINE
INTRODUCTION OF VISITORS
Speaker: It is my pleasure to introduce to the House today the hon. David Carter, Speaker of the Legislative Assembly of Alberta. I am sure all Members will join me in extending a warm welcome to him.
Applause
BIRTHDAY GREETINGS
Mr. Phillips: I would like all Members of this House to join with me today in sending best wishes and a happy birthday to an individual who works closely with us every day in the House. I am, of course, speaking of Bev McCormick from Hansard who always throws the right switches so that our constructive and intelligent comments may be recorded.
Applause
Speaker: Are there any Returns or Documents for Tabling?
TABLING RETURNS AND DOCUMENTS
Hon. Mr. Webster: I have several legislative returns for tabling.
Hon. Mr. Penikett: I have for tabling three legislative returns.
Hon. Mr. Byblow: I also have a legislative return for tabling.
Speaker: Are there any Reports of Committees?
Are there any Petitions?
Introduction of Bills?
Are there any Notices of Motion for Production of Papers?
Are there any Notices of Motion?
Are there any Statements by Ministers?
MINISTERIAL STATEMENT
Rendez-vous Yukon Travel Marketplace
Hon. Mr. Webster: I rise today as the Minister responsible for tourism to announce the upcoming Rendez-vous Yukon Travel Marketplace which will begin June 4 and run through June 7 at the Mount McIntyre Recreation Centre.
Rendez-vous Yukon is designed to provide Yukon suppliers of tour components with the opportunity to market their products to select buyers from German-speaking Europe.
This joint initiative between Tourism Yukon, Canadian Airlines and the Tourism Industry Association of the Yukon signals a new approach in our European marketing efforts.
Tourism Yukon has carefully targeted 13 key wholesalers from our leading German, Austrian and Swiss markets who are interested in selling Yukon tours overseas. These buyers are being flown courtesy of Canadian Airlines International from Frankfurt to Whitehorse return. Twenty-nine local tourism operators have agreed to participate and have paid their $100 registration fee.
During the three-day marketplace, the European wholesalers will have up to 25 appointments with the Yukon-based tour suppliers and other operators of visitor services and facilities. The concept is to have buyers’ and sellers’ interests matched in advance of Rendez-vous, so the face-to-face meetings result in tangible sales.
The Marketplace will conclude with a four-day familiarization trip that will take delegates on a circle tour through Kluane country, over the Top-Of-The-World Highway to Dawson and return to Whitehorse. During the Dawson visit there will also be an opportunity for the wholesalers to meet with local tourism operators.
Rendez-vous Yukon will provide the Yukon’s tourism industry with a positive sales environment at a fraction of the cost of several annual European sales trips. Our objective is to increase visitor traffic from German-speaking Europe, which already accounts for 50 percent of all overseas visitors to the Yukon.
Mr. Phillips: I am pleased to see that the government is cooperating in this kind of effort and I know the Member for Kluane would want me to encourage the visitors to spend more than the allotted 25 or 30 minutes that the normal Yukon tours allot for the Kluane region, so that they may be able to spend one of the four days in one of the most beautiful areas of the territory. We on this side have always believed that we could do much more and be much more aggressive in the marketing of tourism and I wish the participants in this endeavour great success in the coming visit and I would hope to see that many more of these joint innovative marketing techniques are used in the future.
Speaker: This then brings us to Question Period.
QUESTION PERIOD
Question re: Marsh and Tagish Lake water study
Mr. Phelps: I have some questions of the Minister of Community and Transportation Services relating to the environment and, more particularly, to the quality of water in the Marsh and Tagish Lake system. Last fall the government funded the study of the septic systems and soils at Marsh Lake. I would like to know first of all when that study will be completed and the report received by government?
Hon. Mr. Byblow: I will take notice on the question of the Member.
Mr. Phelps: The study itself is fairly big news in the area of Yukon that is taking part. I would like to know whether the government will take steps to ensure that enough copies of the report are printed to make it available to the property owners at Marsh Lake?
Hon. Mr. Byblow: I can give the Member that undertaking once the study is available.
Mr. Phelps: Will the government consult with the residents of Marsh Lake and hold public meetings prior to formulating any policies relating to septic systems in the area?
Hon. Mr. Byblow: I can give that assurance. As a matter of policy and practice, it has been the procedure used by my department and this government to consult on matters affecting policy of areas.
Question re: Marsh and Tagish Lake water study
Mr. Phelps: The concern of many of the property owners is that the government seems to be looking at rules and regulations regarding septic systems without having any reliable background data on the pollution levels, if any, in Marsh Lake. Surely it makes sense to conduct a thorough, systematic testing program of the lake water in order to obtain some solid data on the present situation regarding the lake. Will this government conduct such a testing program on Marsh Lake?
Hon. Mr. Byblow: I have to tell the Member that I am not sure if it is the clear responsibility of the Yukon government to take the lead in this type of undertaking, that is, testing standards of a specific lake. I can tell the Member that my department will certainly be working closely with Environment Canada with respect to any required testing of the standards he refers to.
Mr. Phelps: The problem that people have who live around Marsh Lake, and Tagish as well, is that the data that is supplied by the federal government is not very accurate. It is the result of some water samples that are taken from time to time at the very edge of Tagish River or Marsh Lake, so there is a pretty strong concern...
Speaker: Order, please. Would the Member please get to the supplementary question.
Mr. Phelps: ...there is a strong concern that this government take the lead role and get some good background data. It would not be expensive. Will the government look into this and see whether or not it makes sense to conduct this kind of testing, not only at Marsh Lake, but at Tagish River and Tagish Lake as well?
Hon. Mr. Byblow: I can tell the Member that the initiative shown by this government in undertaking a study of the sewage disposal options for the residents of Marsh Lake is indicative of a responsibility that this government is taking seriously. With respect to required testing to complete and complement the study, I would take advice on it in order to ensure that we either have the capability or that we have the right agencies dealing with those technical matters. The Member is referring to some 500 residents, to my knowledge, who have been contacted through questionnaires relating to the study being undertaken, and I am sure that once we have more data, in more complete detail, we will be following up promptly.
Question re: Marsh and Tagish Lake water study
Mr. Phelps: The problem is this: what we have is a situation where the government has suddenly sent in a team of experts to do soil samples and find out what kind of systems are presently in use. The very natural concern of the residents who live there and are going to be affected a great deal by this study, is that there has been nothing done to determine whether or not there is any problem at all with regard to Marsh Lake. What we have is a couple of sporadic kinds of tests that are taken knee deep in water. It would not be very expensive to do a systematic sampling of the water of Marsh Lake to see if there is problem developing or not - and for Tagish as well. There is a precedent; the government has done it for Carcross. It spent some money and got an engineering firm to do, not only testing of the wells, but testing of the Naires River and Bennett Lake. I am submitting that it makes sense for all concerned that that kind of study be done so that we have background information. It is not very expensive to take the samples from the lake in a systematic way.
Given that preamble, would the Minister look into the situation and see whether or not such studies could be conducted?
Hon. Mr. Byblow: I take the Member’s solicitations seriously. I will undertake to do the necessary consultation and investigation to determine the extent to which the obligations can be met with respect to Marsh Lake.
Question re: Schwatka Lake water quality
Mr. Lang: I have a further question to the Minister of Community and Transportation Services. It is along the same line. A week ago Monday, there was a meeting at city council with respect to possible pollution of Schwatka Lake. There was a very good article in the paper following this. The people involved, the float plane operators, should be commended for the work they are doing, both in policing the area and in taking steps to see that the refueling of their planes will be done off the water. They are going to do it on the land; that is a step in the right direction.
The interesting point that came to me out of the article was that one of the councillors asked which government agency was responsible for water quality of the lake. No one could answer this. Further, it was confirmed that apparently there is no federal agency responsible. In view of what the Minister just said in response to the question from the Leader of the Official Opposition, I really have to question how involved we are if no one knows who is involved with monitoring the quality of the lake water.
In view of the fact that the Minister is fairly familiar with this, I would like to know if it can be confirmed today if it is true that no government agency, federal or territorial, is responsible for monitoring the quality of the lake water?
Hon. Mr. Byblow: I do not profess to be an expert on legal issues affecting water quality of lakes. I want to tell the Member that my information is that Environment Canada has the primary responsibility. There would also be a jurisdictional responsibility with the City of Whitehorse, given that it is within the municipal boundaries.
I have indicated to Members previously that the Yukon government has undertaken something of a strategic planning exercise to address the broad scope of environmental concerns, and we are reviewing the very questionable gray areas pertaining to responsibility on specific environmental matters.
I guess the answer to the Member’s question is that I do not believe that it is accurate to say that there is no agency responsible. Environment Canada has the principle responsibility. I will investigate the Member’s concern further.
Mr. Lang: Why would the Minister make such a statement when, last Tuesday, the federal chief for Yukon Environmental Protection agreed that, currently, there is no agency specifically responsible for lake water quality? Why would the Minister infer that the federal government is responsible? This government announced that it is going ahead with the environmental protection act. Surely, someone should have read what was happening in the provinces. This article goes on further to say that in the province of BC on freshwater lakes there are...
Speaker: Would the Member please get to the supplementary question.
Mr. Lang: Why is the Minister saying it is a federal responsibility when no agency is responsible for it, especially when they have been doing work on this for the last couple of years?
Hon. Mr. Byblow: I have to advise the Member that we are talking about, at least, two or three different jurisdictional matters here. One is with respect to the water intake for municipal, domestic drinking water purposes for which we provide some technical support under the water use license. I think the Member is referring to the general jurisdiction of water quality in lakes at large. That is in federal jurisdiction. Where the matter applies specifically within municipal and community use, we have a support role to carry.
Mr. Lang: I still do not understand why the federal government is saying that it is responsible for it, and you are. I am talking about the people here in charge. They are saying that no agency is in charge of monitoring it. Is the proposed environmental protection act that you have been working on over the last year going to be taking on the responsibility of water quality control monitoring?
Hon. Mr. Byblow: I think the Member is familiar with the fact that water use, territory wide, principally falls under federal jurisdiction. It is spelled out under the Northern Inland Waters Act. That is the primary jurisdictional base for water use. Within municipalities and communities, under water use licensing there is a further federal agency involved. I believe the Member is trying to get at who is responsible for maintaining water control or water quality. That is something that all agencies have to clarify. There is some vagueness pertaining to communities. Territory wide, in the greater Yukon at large, rules are currently spelled out under the Northern Inland Waters Act.
Question re: Hazardous waste disposal
Mr. Nordling: I have a question for the Minister of Community and Transportation Services with respect to hazardous waste disposal. In July of 1985, Environment Canada told this government that we had a problem with the storage of hazardous chemical waste, including PCBs. We still have a problem. Does the Hazardous Waste Storage and Disposal Committee still exist, in light of the new internal strategic plan that is being developed by the departments of Community and Transportation Services and Renewable Resources?
Hon. Mr. Byblow: I will again have to take the question as notice. I do not know the answer.
Mr. Nordling: Question Period is for the purpose of determining government policy. So far, the only thing we have established is that after four years and a high priority rating, we do not have a policy.
To what extent are other agencies such as the City of Whitehorse, Environment Canada, the Department of Indian Affairs and Northern Development, Occupational Health and Safety and Education involved in developing this strategic plan?
Hon. Mr. Byblow: Again, the Member is suggesting that there is no coordination taking place with respect to environmental matters. The Member is clearly aware that in the last year environmental concerns have taken on a new, high profile and this government has responded accordingly. Through various motion debates that have taken place in this House, details with respect to the coordinating efforts have been outlined.
Specifically, in developing the strategic plan, the departments of this government that are involved are clearly aware of the roles of other agencies and are in full consultation with them.
Mr. Nordling: The government’s announcement of this internal, comprehensive, strategic plan is a wonderful way to create the illusion of progress while producing confusion, inefficiency and demoralization. Perhaps the Minister would clarify for us what areas this comprehensive strategy will cover and whether or not it will be incorporated into the long-promised environmental protection legislation?
Hon. Mr. Byblow: The Minister responsible for presenting the act will more specifically be able to speak to intended contents of that act. With respect to the development of that plan and addressing the general issue, my department, in conjunction with Renewable Resources, is working extremely closely with other agencies in assessing the extent of the problem and the extent to which we must prepare our role as the lead agency in addressing environmental concerns. The entire plan will address matters relating to hazardous waste disposal, hazardous waste storage, transportation, and certainly that is not a small matter.
I indicated to Members previously that, within a month, I expect to be reviewing that plan and I will certainly be the first to advise the Members opposite.
Question re: Hazardous waste disposal
Mr. Nordling: I would like to ask the same question to the Minister for Renewable Resources, who is in charge of the environmental protection legislation.
What areas will this comprehensive strategy cover, and will it be incorporated into the environmental protection legislation or will hazardous waste storage and disposal be the subject of its own legislation?
Hon. Mr. Webster: I would like to inform the Member that the same matters that were discussed by the Minister of Community and Transportation Services will be those covered in that piece of legislation. This is dealing with the handling, transportation, storage and, eventually, disposal of hazardous wastes. I envision the process working as part of the overall environmental protection legislation, which I mentioned will come in stages, the first one dealing with pesticides.
Question re: Litter
Mr. Phillips: Last Wednesday, we passed a motion in this House dealing with the problem of litter. Because it has been rather mild lately, and most of our snow has gone, litter is showing up everywhere you look. Clean-up week is not officially until next month. What steps has the Minister of Renewable Resources taken to date to address this problem we have now, instead of waiting another two or three weeks?
Hon. Mr. Webster: I have not been waiting for the next two weeks for the official clean-up month to begin. I have been acting on it, and I want to thank the Member opposite for bringing forth those good ideas in his motion last Wednesday. He put a lot of effort into that, and I appreciate that.
I have had some discussions with the Yukon Liquor Corporation with respect to ways to increase the return of the bottles. I have also had some discussions as to the possibility of the Yukon Liquor Corporation also being the recipient of aluminum pop cans, because that is one area that really needs attention.
I am about to contact some businesses in town that are in the fast food end of things to see what efforts they can make to assist us in cleaning up the environment, and our city streets, in particular. They seem to be littered with their packaging. I am also writing to the Department of Community and Transportation Services to see what it can do to clean up our highways. At various points along our highways, we have evidence of abandoned vehicles that, in many ways, detracts from our visitors’ perception of what the Yukon should be. I will be writing it and other departments within the government to see what efforts they can make individually to get behind this anti-litter campaign.
Mr. Phillips: I might suggest to the Minister, in his letter to the Department of Community and Transportation Services, that he also send one to the Minister of Justice to encourage the Corrections people to get out on the highways. It would be useful work for them to get out and clean up some of the highways.
The City of Whitehorse is already hard at work picking up litter in areas such as around Lewes Blvd. Unfortunately, no one as yet has cleaned up around the schools, and the litter is blowing all over the various roads. In the last few days, we have had fairly strong winds.
Would the Minister instruct government officials to immediately deal with this problem? It is an absolute disgrace to see the areas around the local schools.
Hon. Mr. Webster: Yes, I will be contacting the Department of Education, as well as other departments, to see what they can do. That is one suggestion I will be making to the Department of Education.
I have just been informed by the Minister of Justice that she has already been in touch with officials of her branch, and she assures me that people in the Correctional Institute will be assisting with the clean-up this year.
Mr. Phillips: In the Minister’s speech last Wednesday when we debated the motion on litter, the Minister went on for quite awhile and told us how they were doing a great many things to solve the litter problem in the Yukon and that a great many programs were already in place. I would like to invite the Minister and see if the Minister would come with me tomorrow for lunch and I would like to take the Minister of Tourism and the Minister of Education with me over to some of the local schools on a brief tour to see the problem at first hand. I wonder if the Minister would like to come with me tomorrow and we can actually see how big or how large this problem is?
Hon. Mr. Webster: I have never said that the problem does not exist. In fact, I said quite emphatically in my speech that there is a problem. That is how my speech started off. Sure, we have some programs in place. Obviously, they are inadequate. I have recognized the need for more involvement by every department of this government, which I have already mentioned today, and yes, I will take up the offer of the hon. Member opposite and I will join him tomorrow.
Question re: Hazardous wastes
Mr. Devries: My question is for the Minister of Community and Transportation Services. Presently, in the Watson Lake area, Yukon Electric is assessing the PCB content of its equipment to be in compliance with federal guidelines. Will the Minister have his department monitor and report the results of this assessment and make those results public?
Hon. Mr. Byblow: If there is an exercise being undertaken to assess inventories of PCBs that are not known yet, my officials will certainly be in communication with Yukon Electrical accordingly. It is my understanding that an inventory has been done and, in fact, the department officials are quite aware of where they may exist.
Mr. Devries: I understand Watson Lake is about three-quarters completed. I understand that several pieces of equipment containing PCBs were found at Hyland Forest Products this winter. Does the Minister know where these hazardous materials are now?
Hon. Mr. Byblow: I am not personally aware, but I take the Member’s representation seriously and will investigate immediately as to whether they are safely stored and where.
Mr. Devries: There are also several old garbage disposal areas around the airport where stuff has been buried by the army. Does the Minister know if anything has been done to determine if any of these contain PCBs?
Hon. Mr. Byblow: Again, I am not personally aware of the content of the dump sites he refers to. I suspect that we have dump sites scattered throughout the territory that we are not aware of and I appreciate the Member bringing these to our attention.
Question re: Destruction Bay sewage lagoon
Mr. Brewster: My question is to the Minister of Community and Transportation Services. With all the government’s supposed concern about environment, I would like to know if the government has corrected the problem with the sewage lagoon in Destruction Bay which overflowed last year into Kluane Lake?
Hon. Mr. Byblow: I would have to advise the Member that should there have been a situation in Destruction Bay where the sewage lagoon flowed into the lake, my officials are aware of it and we are taking steps accordingly to rectify the problem.
Mr. Brewster: Well, they should be aware. They were advised in this House last year; they can read it in Hansard. Can the Minister advise this House if the government is still trucking sewage from Burwash Landing and putting it in this overflowing lagoon?
Hon. Mr. Byblow: I have to take notice on the question. I certainly would appreciate it if the Members would try to give me notice on specific technical questions relating to community sewage disposal.
Mr. Brewster: Actually, I gave the former Minister notice, because I asked him exactly the same question. Could the Minister advise this House if they are still trucking sewage from Beaver Creek, 119 miles, and putting it in the same lagoon that is running off into beautiful Kluane Lake?
Hon. Mr. Byblow: I take notice of the question and will get back to the Member.
Question re: Septic pump outs
Mr. Phelps: I have a couple of question regarding the septic pump outs. The problem is that there are not many spots along the highways for recreational vehicles to empty their septic systems. It is a fairly major problem in rural Yukon. Tourists use gravel pits and driveways and camping spots.
I am wondering whether or not the government has a policy in place to provide more septic pump outs at strategic locations along the highways?
Hon. Mr. Byblow: I think the Member is quite aware that there is a motion on the Order Paper dealing with this issue. The policy of the government essentially supports the provision of those services at strategic locations as they may apply to unorganized communities. This government provides for funding to support the creation of these facilities. The Member is also aware that within municipalities these facilities are provided and that they do exist quite extensively. Should there be any specific increase of support required, we will address that.
Mr. Phelps: The motion is mine. I put in on the Order Paper because I perceived there were more required. It reads, “THAT the Government of Yukon consider the development of a program that would assist the private sector in providing proper septic pump outs at strategic locations along major highways.” Will the government consult with highway lodge owners with a view to developing a policy or program to increase the number and the locations of these pump outs?
Hon. Mr. Byblow: The Member is aware that, in many communities, the private sector does provide these septic pump outs. Where possible, we try not to interfere with the private sector in any competitive way for further provision. The Member is suggesting that we assist the private sector with financing to provide these pump outs. It is a question we will have to address with the private sector who have provided these themselves.
Certainly the short answer to the Member’s question is that there is no problem in establishing communication and consultation with highway lodges to see the extent of government support needed.
Mr. Phelps: I look forward to the department entering into consultation with the highway lodges. There are not that many in the Yukon so it will not be a big job. I am wondering whether, as well, it will take steps to ensure that the RV traffic coming to the Yukon is made aware of the availability of the pump-out facilities and the location because that is one of the problems; they do not know how far it is to one and so they just use somebody’s driveway or whatever is handy.
Hon. Mr. Byblow: I am working from memory, but it seems to me that such information is provided in all of the tourism literature that is handed out. I can certainly undertake to ensure that it is indeed included in any literature produced by this government, and, if the Member is suggesting that there is inadequate information to the travelling public, I undertake to investigate that and provide it.
Question re: Hospital sewage
Mrs. Firth: I would like to ask the Minister of Community and Transportation Services another question about the environment. There are presently no federal or territorial laws, nor municipal bylaws that specifically deal with the disposal of wastes from hospitals in the Yukon. In the legislative return tabled by the Minister, it was indicated that wastes were incinerated at the hospitals by the hospital staff themselves. That does not include toxic liquid wastes such as mercury and lab chemicals.
Is there a procedure in place to deal with the disposal of those toxic materials and what is the procedure?
Hon. Mr. Byblow: This is an area we are addressing in the development of a plan relating to issues surrounding the environment and the storage and disposal of hazardous wastes. The current policy, if you will, is that the responsibility for the proper and adequate storage of hazardous wastes is with the originator of the toxic material. That clearly is something that we will be looking at in the attempts we are undertaking to provide a lead agency role in addressing the matter. Hospital wastes will also be included in our plan for the method by which we will address the continuance of proper safe storage, handling, transportation, and eventual disposal of hazardous wastes.
Mrs. Firth: I hear about a lot of plans and a lot of organization, but I am looking for some specifics. The policy currently is that those toxic chemicals are kept at the hospital in storage containers, and then they try to get rid of them. I would like to ask the Minister, specifically, if he has given any direction to the officials in his department to contact the federal officials with respect to the storage and disposal of those hazardous wastes?
Hon. Mr. Byblow: I have not given direct instructions. Certainly the issue is one that has to be addressed and will be addressed in our long-term plans, and that is the current state of the matter.
Mrs. Firth: I would like a new question, please.
Question re: Pollution clean-up policy
Mrs. Firth: Right now, I have been listening to the Minister’s responses to questions and, as far as I can determine, this government is saying that it is not responsible for clean lake water, that that is somebody else’s responsibility; it is not responsible for the sewage that is being dumped into the lake in the Member for Kluane’s riding; it does not want to take the lead role for it is always someone else’s job; the wastes at the hospital are going to be looked after and addressed; it does not know anything about the sewage that is being dumped on the highway.
I would like to ask exactly what the steps are here. Do we have to wait for a disaster or a spill to take place before this government is going to do something? In the event that that happens, with the trucks passing through the Yukon, who does take the lead role? Can the Minister answer that question for us? Who steps in when there is a disaster and takes the lead role when it comes to that kind of a problem?
Hon. Mr. McDonald: The Members across the floor are referring to my weight problem.
There is currently a regulatory regime that is operating within the Yukon and has operated within the Yukon for some considerable time. There are federal departments - Environment Canada and the Northern Affairs Program - that have legislation to support and to administer in the territory at the present time. That legislation is in effect, as far as I am aware. Certainly the Parliament of Canada has not indicated to us that they have taken that legislation out of operation in the Yukon, with respect to the environment in particular. The management of lakes and waters is clearly a federal responsibility in the territory. The territorial government has shown in good measure that the issues are addressed in the areas where there are overlaps in jurisdiction.
When it comes to the managing of waste, this government took a lead role in ensuring that the issue was brought to the forefront of the public’s attention by indicating that it was willing to manage the storage of waste in the territory. It did so despite some of the criticism from across the floor. This government has been taking a lead role in the development of legislation. Many of these cross-jurisdictional issues will be addressed.
Question re: Robinson subdivision access road
Mr. Phelps: The chief apologist for the government, the man with the hand who reaches over to his back no matter what position the rest of his body is in, has just spoken. If the next election does not go too well I know he can get a job as a contortionist.
Obviously the government does not have many answers and does not know where to turn for information. I will try a different tack on a question. I know somebody over there will be able to answer it. It has to do with a more mundane subject - the Robinson subdivision. I am receiving calls with respect to the condition of the access road to the subdivision. I am told there are two lakes on this road at least 60 feet long that make this road impassable for most vehicles.
Do the original specifications for the road call for a road that would be rendered impassible by spring thaw?
Hon. Mr. Byblow: I am somewhat aware of the issue the Member raises. It is my understanding that officials are at the Robinson subdivision today to determine if there is any engineering deficiency relating to the puddles on the road. I can assure the Member that should there be any corrective action needed relating to the original design of the road this government will address it immediately.
Mr. Phelps: I did give the Minister notice of the question; perhaps that sped up the reaction time of the officials involved. It is a hazardous situation in that there are families with kids currently living in the subdivision. If there is an accident or an emergency they would have to walk out. The road is impassible, I am told. Will the Minister ensure that steps will be taken immediately to correct the situation?
Hon. Mr. Byblow: The Member has my assurance that we will take any necessary steps to ensure that any engineering deficiency of the subdivision will be addressed. The Member has to realize that the Robinson subdivision is one of those subdivisions that this government put onstream in an effort to maintain the low cost of land, also an issue that Members opposite have raised with us. The standards relating to the road were kept at an absolute minimum in order to preserve the low cost. The Member is fully aware that is an effort this government undertook.
By no means am I suggesting that the road standards are kept below an acceptable level. If that is found to contribute toward the flooding reports we are getting, we will correct that.
Mr. Phelps: I was of the understanding that it was a homesteader subdivision and not restricted just to duck farms. If the government is not willing to remedy the problem, could they get in contact with Ducks Unlimited to see if it could preserve the marshlands and wetlands? It would be a good breeding area for ducks and geese.
Hon. Mr. Byblow: Until I have had a report from officials on the size of the lake, I will save making contact with Ducks Unlimited.
Speaker: The time for Question Period has now lapsed. We will now proceed with Orders of the Day.
ORDERS OF THE DAY
Hon. Mr. McDonald: Pursuant to an agreement between the House Leaders, I would request the unanimous consent of the House to proceed with five motions respecting standing committees of the House.
Speaker: Is there unanimous consent?
All Hon. Members: Agreed.
Speaker: There is unanimous consent.
GOVERNMENT MOTIONS
Motion No. 40
Hon. Mr. McDonald: I move
THAT Standing Order 45 be amended to read as follows:
45(1) At the commencement of the first session of each Legislature a Standing Committee on Rules, Elections and Privileges and a Standing Committee on Statutory Instruments shall be appointed.
(2) At the commencement of the first session of each Legislature a Members’ Services Board with the Speaker as Chair shall be appointed.
(3) At the commencement of the first session of each Legislature a Standing Committee on Public Accounts shall be appointed and the Public Accounts and all Reports of the Auditor General shall stand referred automatically and permanently to the said Committee as they become available.
(4) At any time, a Special or Select Committee may be appointed for any purpose or to consider any matter referred to it.
(5) No Standing, Special or Select Committee shall consist of more than seven members without the consent of the Assembly.
(6) The Clerk shall distribute to every member a list of the Members comprising the Committees and the Members’ Services Board.
Speaker: It has been moved by the hon. Government House Leader
THAT Standing Order 45 be amended to read as follows:
45(1) At the commencement of the first session of each Legislature a Standing Committee on Rules, Elections and Privileges and a Standing Committee on Statutory Instruments shall be appointed.
(2) At the commencement of the first session of each Legislature a Members’ Services Board with the Speaker as Chair shall be appointed.
(3) At the commencement of the first session of each Legislature a Standing Committee on Public Accounts shall be appointed and the Public Accounts and all Reports of the Auditor General shall stand referred automatically and permanently to the said Committee as they become available.
(4) At any time, a Special or Select Committee may be appointed for any purpose or to consider any matter referred to it.
(5) No Standing, Special or Select Committee shall consist of more than seven members without the consent of the Assembly.
(6) The Clerk shall distribute to every member a list of the Members comprising the Committees and the Members’ Services Board.
Motion No. 40 agreed to
Motion No. 41
Hon. Mr. McDonald: I move
THAT the hon. Members Piers McDonald, Tony Penikett, Art Webster, Dan Lang and Willard Phelps be appointed to the Standing Committee on Rules, Elections and Privileges;
THAT the said committee have the power to call for persons, papers and records and to sit during intersessional periods; and
THAT the Clerk of the Legislative Assembly be responsible for providing the necessary support services to the committee.
Speaker: It has been moved by the hon. Government House Leader
THAT the hon. Members Piers McDonald, Tony Penikett, Art Webster, Dan Lang and Willard Phelps be appointed to the Standing Committee on Rules, Elections and Privileges;
THAT the said committee have the power to call for persons, papers and records and to sit during intersessional periods; and
THAT the Clerk of the Legislative Assembly be responsible for providing the necessary support services to the committee.
Motion No. 41 agreed to
Motion No. 42
Hon. Mr. McDonald: I move
THAT the hon. Members Doug Phillips, Maurice Byblow, Norma Kassi, Joyce Hayden, and John Devries be appointed to the Standing Committee on Public Accounts;
THAT the said committee have the power to call for persons, papers and records and to sit during intersessional periods; and
THAT the Clerk of the Legislative Assembly be responsible for providing the necessary support services to the Committee.
Speaker: It has been moved by the hon. Government House Leader
THAT the hon. Members Doug Phillips, Maurice Byblow, Norma Kassi, Joyce Hayden, and John Devries be appointed to the Standing Committee on Public Accounts;
THAT the said committee have the power to call for person, papers and records and to sit during intersessional periods; and
THAT the Clerk of the Legislative Assembly be responsible for providing the necessary support services to the committee.
Motion No. 42 agreed to
Motion No. 43
Hon. Mr. McDonald: I move
THAT the hon. Members Margaret Joe, Danny Joe and Bill Brewster be appointed to the Standing Committee on Statutory Instruments;
THAT the said committee be empowered to sit during intersessional periods;
THAT the said committee review all new regulations as they are published;
THAT the said Committee review such other existing or proposed regulations as are referred to it by the Assembly; and
THAT the Clerk of the Legislative Assembly be responsible for providing the necessary support services to the said committee.
Speaker: It has been moved the hon. Government House Leader
THAT the hon. Members Margaret Joe, Danny Joe and Bill Brewster be appointed to the Standing Committee on Statutory Instruments;
THAT the said committee be empowered to sit during intersessional periods;
THAT the said committee review all new regulations as they are published;
THAT the said committee review such other existing or proposed regulations as are referred to it by the Assembly; and
THAT the Clerk of the Legislative Assembly be responsible for providing the necessary support services to the said committee.
Motion No. 43 agreed to
Motion No. 44
Hon. Mr. McDonald: I move
THAT the Standing Committee on Rules, Elections and Privileges review:
(1) the Standing Orders of the Yukon Legislative Assembly, and
(2) the addendum to the Standing Orders which is entitled “Guidelines for Oral Question Period;” and
and THAT the committee report to the Assembly its recommendations for amendments to the Standing Orders and to the Guidelines for Oral Question Period; and
THAT the committee be empowered to make such interim reports as it should deem necessary.
Speaker: It has been moved by the hon. Government House Leader
THAT the Standing Committee on Rules, Elections and Privileges review:
(1) the Standing Order of the Yukon Legislative Assembly, and
(2) the addendum to the Standing Orders which is entitled “Guidelines for Oral Question Period; and
THAT the committee report to the Assembly its recommendations for amendments to the Standing Orders and to the Guidelines for Oral Question Period; and
THAT the committee be empowered to make such interim reports as it should deem necessary.
Motion No. 44 agreed to
Speaker: Government Bills.
GOVERNMENT BILLS
Bill No. 70: Second Reading
Clerk: Second reading, Bill No. 70, standing in the name of the hon. Ms. Joe.
Hon. Ms. Joe: I move that Bill No. 70, entitled An Act to Amend the Insurance Act, be now read a second time.
Speaker: It has been moved by the hon. Minister of Justice that Bill No. 70, entitled An Act to Amend the Insurance Act, be now read a second time.
Hon. Ms. Joe: These amendments to the Insurance Act are being introduced to provide for the Yukon’s participation in the National Canadian Life and Health Insurance Compensation Plan. Although the amendments appear to be housekeeping in nature, they are significant in that licensure, which is the company’s ability to market and sell their insurance product here, will be based upon the life insurance company being a member of the compensation corporation responsible for overseeing the plan.
You may recall that in April 1987 similar amendments were introduced to provide for our participation in the general insurance property and casualty compensation plan. As with these amendments, life insurance is based on the companies being members of the property and casualty compensation corporation. For your general information, the property and casualty corporation is responsible for ensuring that the plan is in place and on August 31, 1988, Yukon became a participating member.
Several years ago a number of general insurance companies failed and with their failure the vulnerability of the unprotected consumer was brought into focus. Governments and the insurance industry then set out to establish consumer protection plans for both the general insurance market and the life and accident and sickness insurance industry. As the life and accident and sickness plan enters its final stages of fine tuning, these amendments will provide the mechanism that will allow us to become participating members in this national compensation plan.
This plan, like the general plan, will be operated through a non-profit corporation managed by the industry. All superintendents of insurance will act as ex officio non-voting members of the corporation.
I am pleased to report that all Canadian jurisdictions recognize the need for such plans and a number of provinces have already or are in the process of amending their legislation to accommodate participation.
I would like to take this opportunity to thank the Canadian Life and Health Insurance Association for the advice and assistance it has so willingly provided me in the development of these amendments.
Mrs. Firth: We recognize the principle of this bill and anticipate its speedy passage in Committee of the Whole. I would just like to say, in addition to the explanation that the Minister has already given, that there is a protection here for the consumer that we are in favour of, which other insurance companies provide. Now it will be extended to those companies that sell life insurance as well.
I understand from consultation that I have done with the industry that it will be run by the industry, that there will be no government funding needed to implement this legislation.
By way of notice, I would just like to tell the Minister that there is a typographical error in the bill. Perhaps she could bring in the necessary corrections for committee. It is in the last clause; it should be section (b.1) not (b.3).
We look forward to the passage of this legislation and do not anticipate any controversy.
Motion for second reading agreed to
Bill No. 79: Second Reading
Clerk: Second reading, Bill No. 79, standing in the name of the hon. Ms. Joe.
Hon. Ms. Joe: I move that Bill No. 79, An Act to Amend the Occupational Health and Safety Act, be now read a second time.
Speaker: It has been moved by the hon. Minister of Justice that Bill No. 79, entitled An Act to Amend the Occupational Health and Safety Act, be now read a second time.
Hon. Ms. Joe: This amendment to the Occupational Health and Safety Act is being introduced to address the evolving needs of government employees for broader protection from health and safety hazards. Since the introduction of the Occupational Health and Safety Act, the government has been obligated to comply with most of the safety standards and specifications established under the act. This compliance has been further enhanced by the development of government policies in these areas. However, the government has not been bound by the procedures of enforcement within the act. This amendment will bind the government to the Occupational Health and Safety Act.
The amendment will impact the government in several areas. The act requires that a safety committee be established for every workplace regularly employing 20 or more workers. YTG workplaces requiring the safety committees have already been identified in the Public Service Commission. The Yukon Government Employees Union and the occupational health and safety unit are cooperating to establish the additional committee.
While it may not occur frequently, public service employees will be able, under certain conditions, to refuse hazardous work. A safety officer will investigate each matter and file a decision. All safety orders and decisions will now be appealable to the Occupational Health and Safety Board. Safety officers will have the authority to investigate the government and, if warranted, issue an order for the carrying out of anything required by the act and can specify a time frame. In the unlikely case of imminent danger, the safety officer can order a place, matter or thing to shut down until the danger is remedied.
Enforcement remedies, such as penalties and prosecution, are specified in the act; however, it is very unlikely that these will need to be applied to the government. Most government concerns relate to ventilation and contaminate control in a thermal environment and Government Services has been more than cooperative in its voluntary efforts to comply with the recommendations of the safety officers.
The occupational health and safety program emphasizes the delivery of education, training and consultation. A great deal of assistance and consideration is afforded to all employees in meeting requirements of the legislation. Orders are issued but prosecutions are commenced only under the most blatant circumstances and never without some previous exchange between the parties. For example, of 675 work orders issued in 1988, only two led to prosecution.
In summary this positive amendment eliminates the restrictions presently imposed on public service employees of not being able to fully access the health and safety legislation. The change brings our legislation in line with that in force in other Canadian jurisdictions and is another positive step in the government’s role as an employer.
Mrs. Firth: I thank the Minister for the presentation. It is a minor amendment, and we are going to be agreeing with it. I do not anticipate any controversy in the reading.
Motion for second reading agreed to
Hon. Mr. McDonald: I move that the Speaker do now leave the Chair and the House resolve into Committee of the Whole.
Speaker: It has been moved by the hon. House Leader that the Speaker do now leave the Chair and that the House resolve into Committee of the Whole.
Motion agreed to
Speaker leaves the Chair
COMMITTEE OF THE WHOLE
Chair: Committee of the Whole will come to order.
We will recess, and when we return we will be dealing with bills in the following order: Bill No. 37, 70, 79 and 51.
Recess
Chair: Committee of the Whole will come to order.
We will deal with Bill No. 37. Is there general debate?
Bill No. 37 - An Act to Amend the Home Owners’ Grant Act
Hon. Mr. Byblow: The amendments that are being proposed in this bill entitled, An Act to Amend the Home Owners’ Grant Act, are very short, but, as explained in second reading, they effectively permit an increase to the home owners’ grant to owners of property and homes.
For the benefit of Members, the grant works in such a manner as to allow up to 50 percent of their taxes to a maximum of $450, and, in the case of seniors, up to 75 percent of a refund on their taxes to a maximum of $500.
Essentially, how that applies in real dollars is if home owners pay up to $900 for their taxes, they will get the maximum allowable under the grant. If seniors pay $667 or more in property, they will get the maximum $500.
We have budgeted for this. I believe the amount anticipated to be paid out under this grant will increase by $136,000. These two amendments would simply kick that increase to the grant into place.
Chair: Is there further general debate?
On Clause 1
Clause 1 agreed to
On Clause 2
Clause 2 agreed to
On Title
Title agreed to
Hon. Mr. Byblow: I move that Bill No. 37 be reported out of committee without amendment.
Motion agreed to
Bill No. 70 - An Act to Amend the Insurance Act
Chair: We will proceed with Bill No. 70. Is there general debate?
Hon. Ms. Joe: I just want to let you know that there has been extensive research done with regard to the typo that we thought might have been in this bill, and we have found out that it was not a typo. In fact, the proper section was listed.
Mrs. Firth: That is correct. To add to what the Minister has said: there was a further amendment in this revised statute supplementary appendix that we have just received. I checked with the department this morning regarding the section and they had felt that there was a typographical error, but the Minister has confirmed, after checking with them, that it is consistent with the amendment that came in April 16, 1987. I am prepared, therefore, to move to the clause-by-clause debate.
On Clause 1
Clause 1 agreed to
On Clause 2
Clause 2 agreed to
On Clause 3
Clause 3 agreed to
On Clause 4
Clause 4 agreed to
On Title
Title agreed to
Hon. Ms. Joe: I move Bill No. 70 be reported out of committee without amendment.
Motion agreed to
Bill No. 79, An Act to Amend the Occupational Health and Safety Act.
Chair: We will proceed with Bill No. 79. Is there general debate?
On Clause 1
Clause 1 agreed to
On Clause 2
Clause 2 agreed to
On Title
Title agreed to
Hon. Ms. Joe: I move that you report Bill No. 79 out of committee without amendment.
Motion agreed to
Bill No. 51 - First Appropriation Act, 1989-90 - continued
Department of Renewable Resources - continued
On Policy and Planning
Mr. Brewster: I just got the returns today and I am a little surprised at the one regarding Sulphur Lake and the University of BC, where you say they got permission from the Department of Indian and Northern Affairs. Yet, they are doing their work in the Kluane Game Sanctuary. Has the Department of Indian and Northern Affairs taken over the Kluane Game Sanctuary?
Hon. Mr. Webster: According to the legislative return, the enforceable agreements with the University of British Columbia in the wildlife sanctuary are with ...
Mr. Brewster: Does the Minister prefer I not go ahead with this?
Chair: We are on general debate.
Mr. Phillips: I understand we are still on general debate.
Chair: We are on general debate on policy and planning on page 302.
Mr. Phillips: I will deal with this issue later in the budget.
Mr. Lang: I realize we are going into the various line items. I have a question on the International Biological Program, which would come under the question of policy and the involvement of the Department of Renewable Resources. My question, and the response I received, was that a report has been drafted. When will that report be made available? Will it be made available to the public? What areas are we speaking of, and is there a possibility of enhanced protection on some of the sites? I am taking this from the legislative return.
Hon. Mr. Webster: That will be made available sometime in May. II would like to point out that it is a report by DIAND.
Mr. Lang: I recognize that. In order for DIAND to come into the territory it must have requested the approval of the Government of the Yukon. When did the government give the necessary authorization to proceed with the study of the so-called international biological sites? Or did the department just go ahead and do it?
Hon. Mr. Webster: Yes, DIAND invited the Government of the Yukon to be part of the steering committee to look at the sites.
Mr. Lang: That still does not answer my question. In the 1970s there was a request to the government, even prior to party politics, and the decision at that time was that the government was no longer to be involved with this program, largely because it was seen to be another way to alienate Yukon land for whatever purpose.
When did the YTG give approval for this program to be implemented in the Yukon? It is not a question of a steering committee, it is a question of one government requesting another government to play a part in it.
Hon. Mr. Webster: DIAND never asked permission of the Government of Yukon to proceed with this. We were invited to be on the steering committee.
Mr. Lang: For the record, I think the Member will find a formal request on the file that came in the 1970s for the Government of Yukon to become involved. At that time the government took a negative position. I stated one of the reasons earlier. A lot of people are after real estate in the Yukon and the more actors that get involved the less there will be for the general public. I want to forewarn the Minister of that.
The other point I would like to make is that I want the Minister to commit himself to make sure I get a copy of this report when it is available.
Could the Minister also find out from DIAND which sites outlined in this report are in need of enhanced protection? What is the government’s intention?
Hon. Mr. Webster: The information that the Member is requesting will be contained in recommendations of that report. It is a DIAND report and will be released by it.
Mr. Lang: A lot of these reports seem to come and go. Since the Minister will be getting a copy can he ensure that I get a copy as well so I do not have to run around through government departments?
Hon. Mr. Webster: I can make that assurance.
On Director
Director in the amount of $182,000 agreed to
On Programmes
Programmes in the amount of $474,000 agreed to
On Strategic Planning
Hon. Mr. Webster: Strategic planning can be broken down as follows: we have $64,000 for personnel costs. Other costs are $7,400. It reflects a change of 31 percent in the negative, largely due to a decrease in the amount budgeted for travel.
Strategic Planning in the amount of $71,000 agreed to
On Policy Analysis
Hon. Mr. Webster: This deals with three person years and the personnel costs associated arein the amount of $170,000. The total other costs are $36,000. This is a decrease of approximately 10 percent, partly due to the effect of extra funding received from DIAND last year. This was related to conservation strategy projects. That money is not necessary this year.
Mr. Lang: What exactly does the Minister see these people doing with respect to policy analysis? What areas are they going to be looking at? What can we expect to see presented to us in the fall or next winter?
Hon. Mr. Webster: There are a number of activities in the area of analysis development. They are all related to the proposed new wildlife act, which we intend to bring in during the fall sitting of this Legislature.
Policy Analysis in the amount of $214,000 agreed to
On Environmental Protection
Hon. Mr. Webster: As I indicated in my opening remarks, this is a new program and a new person year. There are $49,000 associated with the personnel costs and approximately $40,000 for Other. This totals $90,000.
Mr. Lang: Forty thousand dollars for Other is a substantial amount of money. Can the Minister outline how that is going to be spent?
Hon. Mr. Webster: Five thousand of that total will be for travel within and outside the Yukon. Another $10,000 will be for service contracts. There are a variety of small, miscellaneous costs. There is $20,000 for non-consumable assets.
Mr. Lang: What are non-consumable assets?
Hon. Mr. Webster: I cannot provide the Member with that information at this time. It is unconsumable assets. I think it is related to items to be purchased for the start up of this new unit. I will come back with that information.
Environmental Protection in the amount of $90,000 agreed to
Chair: Are there any questions on Allotments and Person Year Establishment?
Policy and Planning in the amount of $1,031,000 agreed to
On Parks, Resources and Regional Planning
Mr. Phillips: My question is in relation to the planned bridge construction at Wolf Creek. It still seems rather high at $76,000 for one bridge, not two, that we are building at Wolf Creek. I want to ask the Minister if when they are constructing this bridge and ripping out the old bridge they will meet with and discuss with the Department of Fisheries as well as our own fisheries people because there are grayling in that creek and salmon spawning in that creek. There are going to be more salmon fry put in at the end of May and this is the first year we have the return of the adult salmon, so any construction that takes place in that creek should take into consideration that it is pretty critical to the fish. You just cannot get in there with Cats and bulldozers and work the creek all up without disturbing the fish, and they should coordinate their efforts with the Department of Fisheries.
Hon. Mr. Webster: I want to thank the Member for a suggestion as to the timing of this project. I would also like to point out at this time that the cost for this project, as indicated in the legislative return tabled today, includes $47,500 for associative approach upgrading and also, more importantly, the road resurfacing in the bottom end of that campground. I also want to point out that the new bridge will include a pedestrian salmon-viewing area.
Mr. Phillips: Will the work on the bridge and the creek and the road work that has to be done leading up to the bridge be tendered privately?
Hon. Mr. Webster: Yes, it will be tendered.
On Director
Director in the amount of $125,000 agreed to
On Parks and Outdoor Recreation
Mr. Devries: My concern is again, as I brought up earlier, concerning Rancheria Lodge. They desperately want the property that the campground is located on right next to them. It has them boxed in so they cannot expand any further. I can see their point. I believe Rodger Vizbar is going down there today and if he disappears on this trip, I hope we can jump to the conclusion ...
This is not a threat, but they are very desperate about getting this property and I believe he is making a commitment to Rodger that he would be willing to look after the campground for the three years at no charge to the government, and return all monies collected on behalf of the tourists over to the government on some agreement that it somehow or other move the campsite or give him access to the property. I think it is something for the Minister to look into.
Hon. Mr. Webster: The reason the Government of Yukon maintains that campground in Rancheria was outlined in the legislative return filed a couple of weeks ago. It is, of course, our policy that campgrounds be spaced at certain distances along the highways. Given the interest of the individual at Rancheria to expand his own operation in the area of the present campground, our department could take a look at other suitable locations in the vicinity for establishing a new campground. We can look at that this summer, but for this season that campground will remain associated with the Government of Yukon.
Mr. Devries: I am not sure that it was Rodger Vizbar, but that is beside the point. His concern is that originally Big Creek and Swift River used to have campgrounds that were converted to day use and he just feels that, by converting the Rancheria campground to an overnight - or whatever it was - is a conflict with his business. He also has a campground right in his backyard. I just want the Minister to be aware of it.
Parks and Outdoor Recreation in the amount of $383,000 agreed to
On Regional Planning
Regional Planning in the amount of $357,000 agreed to
On Development and Operations
Development and Operations in the amount of $992,000 agreed to
On Yukon Land Use Planning
Mr. Lang: Perhaps the Minister could update us on the plans on this. It just seems to keep on going without ever seeing any results.
Hon. Mr. Webster: I must explain to the Member, although I do not think it is required, that there are new areas coming under review all the time. The Member may recall from our previous discussion that one of the areas recently considered is the Old Crow area. Another recently completed is the Kluane area.
As I say, then, new areas are constantly being reviewed under this land use planning process.
Mr. Lang: I just want to know the position of this government. When the land claims are settled will the land use plans apply to those lands that are transferred under land claims?
Hon. Mr. Webster: Yes, that is the intent. The exception will be class A lands that are obtained by the Indian bands.
Mr. Lang: I just want to get this clear. Is it correct that the land use plans will not apply to the class A lands?
Hon. Mr. Webster: In most cases I would imagine they will comply with the land use plans for their areas but they are not compelled to.
Yukon Land Use Planning in the amount of $285,000 agreed to
Parks, Resources and Regional Planning in the amount of $2,142,000 agreed to
Chair: Are there questions on the information contained in page 305?
On Fish and Wildlife
Mr. Lang: I would just like to go into general debate for a moment. I was a little concerned the other day when we discussed the question of possible predator control. The response that came across was primarily related to zone 7 and 9. I think it is safe to say that part of the problem is that there is no predator control program in place. I just want to register my concern about another season going by where nothing is in place and the big game animals are getting more and more depleted in the area.
All I ever see happening by the government is that the people I represent are in a situation where they are under more and more regulations. It seems to be the answer from this department to just put more regulations on those few hunters who would go into that area. I just do not believe that to be fair. We still have people hunting in there because of the situation with the Indian Act. At the same time, we are doing nothing to enhance the wildlife. All we are doing is setting up committees, doing studies and research projects and what is the result? The result is unsatisfactory. More importantly, it is not in the game animals’ best interest, which the Department of Renewable Resources is paid to manage.
It is absolutely essential that something be put into place very quickly. We cannot afford to wait around any more. We saw this flounder around with the previous Minister for three and one-half years because of some stupid, silly political statements he had made the year previously. They had to ride it out because it was a question of honour and integrity in the political realm or some such thing. At the same time, there is consensus among the general public that zones 7 and 9 have been badly managed and that the ramifications to the game population there have been a tragedy.
I feel that we have to get something into place there. If the Department of Renewable Resources feels its mandate is to get to the point at which nobody hunts, maybe that should be our ultimate end. If it is, we do not need a Department of Renewable Resources. We will just take everyone’s rifle away.
There is a consensus here. We will not be criticizing the government when it takes logical steps to try and increase the game in an area. I can assure the Minister of that. The political mine field was not there when the political roles were reversed previously, about six or seven years ago. I think that for the sake of the wildlife we should get something in place this year.
Hon. Mr. Webster: The Member is quite right in saying there will be no measures introduced this year to look at that situation. However, I dispute his claim that nothing is being done other than putting new restrictions on hunters. Some work is going on in the development of a big game management plan for game zones 7 and 9. The work of that group will be completed this September and recommendations will be coming forth to the Wildlife Management Board then to Cabinet soon thereafter.
Unfortunately, it will not be for this year, but will definitely be for the following season.
On Director
Director in the amount of $139,000 agreed to
On Small Game Management
Small Game Management in the amount of $659,000 agreed to
On Big Game Management
Big Game Management in the amount of $1,008,000 agreed to
On Habitat and Research
Mr. Lang: Has the government taken any policy decisions with respect to the use of all-terrain vehicles?
Hon. Mr. Webster: No, we have not.
Mr. Phillips: Will it be? Can we anticipate something coming in the fall, possibly with the Wildlife Act changes, that will address the problem?
Hon. Mr. Webster: That situation will be addressed by the Wildlife Management Board in a paper that is now in a draft form. That will be presented to it for consideration in September.
Mr. Phillips: Are there any plans this year to carry out any habitat enhancement? Are there any projects this year in this budget?
Hon. Mr. Webster: Right now there are no projects planned for this summer. There was one initially planned through a controlled fire program but, unfortunately, we cannot go ahead with that one this year. We are in the process of striking a new agreement with Habitat Canada, which is a joint funding arrangement for the next three years for habitat enhancement. We have not identified specific projects yet.
Mr. Phillips: What prescribed burning cannot go ahead this year? Why not?
Hon. Mr. Webster: The area that was under consideration was the east side of Kluane Lake. We were about to make an arrangement with the northern fire service to do it at a certain time of year. Unfortunately, they have recently indicated that their crews will all be on fire suppression, and they will not be available to help us with this fire control program.
Mr. Phillips: Can I suggest to the government that we look at this area of habitat enhancement, especially prescribed burns? It is not an area that we really have to experiment with so much as BC and Alberta have been doing it for years and it has been extremely effective, especially in the area of sheep ranges and this type of thing. We are not reinventing the wheel; we are asking that we start looking at some habitat enhancement projects. Some of them could be done near highways where sheep could be drawn to the highway for viewing. It could have been done a long time ago; I have no idea why it was not. I do not know why we are dragging our feet on it and are not looking at some specific projects. It would tie in nicely with tourism as well and would certainly be beneficial to the species where the habitat would be enhanced.
Hon. Mr. Webster: I certainly have no quarrel with the Member opposite on the effect of the controlled-burn programs. Apparently, here in the Yukon, Northern Affairs is reluctant to become involved with such a program due to a bad experience they recently had in the Northwest Territories.
Mr. Lang: Because we had a bad experience somewhere does not mean we do not continue to meet objectives. I concur with my colleague. It has been very successful in BC and Alberta. There is no reason that Northern Affairs cannot become involved here. It is important that the government push them to make some plans and commitments. If it is done close to highways it can be very beneficial to the travelling public from a tourism point of view. It may also increase the population of these herds.
Mr. Phillips: This is the time of year we should be doing it.
Hon. Mr. Webster: Again, our department recognizes the importance, need and benefits to be derived from such a program. As I indicated, Northern Affairs has been reluctant to give us the permits. They outright refused. I would think that situation would change when this government has that responsibility devolved to us a year and one-half from now.
Mr. Lang: We are all getting older. The department could be pushing this. Here is another way of increasing the wildlife population, and we are throwing up our hands.
Will the Minister personally push to see that we get something together in the area of prescribed burns within the next year? This forestry transfer may not take place for another two or three years. Who knows? In the meantime we should use whatever tools we have available to us.
Hon. Mr. Webster: As the new Minister to this portfolio, I will undertake to make another attempt to work with Northern Affairs.
Mr. Lang: Would the Minister update the House regarding the results of the goat transplant program to Jake’s Corner that took place a number of years ago? Has the herd increased? If so, by how much?
Hon. Mr. Webster: I regret to announce that, despite some searching, I am not familiar with that program. I will return that information when it becomes available.
Mr. Phillips: I would like to make another suggestion to the Minister about habitat enhancement and the Mount White goat area and would ask that he treat it in a serious vein. We do not have to ask forestry branch for permission to do this one. Could we get in contact with the Foundation for North American Wild Sheep? They have done this type of thing before. We could look at creating a natural salt lick on the north side of Mount White from the Jake’s Corner area. It has been done before by the Foundation for North American Wild Sheep. They have plans for this type of thing. You can make it look like a natural lick. The goats will eventually find the area. We could create a wildlife viewing area right off the highway by Jake’s Corner. The tourists could pull in. We could have a summer student telling the story of the successful transplant. The goats would come to the lick on a regular basis and people could observe them through telescopes. I think they should seriously consider something like this. It is one of the reasons they were put on Mount White, to be near the Alaska Highway. If we created a salt lake on that north side of the mountain, facing the Alaska Highway, it may draw the goats and people may be able to observe them in the future.
Hon. Mr. Webster: I thank the Member for his suggestion. We have had some cooperation on a project with this association; I do not foresee any problems doing another one.
Habitat and Research in the amount of $549,000 agreed to
On Field Services
Field Services in the amount of $1,288,000 agreed to
On Fisheries Management
Mr. Phillips: Is there a plan to increase the resident fishing licence fee again next year? Is this increase going to be sufficient for several years to come?
Hon. Mr. Webster: No, there is no planned increase in fishing fees next year. We will be making an assessment at the end of this fishing season as to the fee structure and making some recommendations.
Mr. Phillips: Have we met yet with the Alaskan officials to discuss a reciprocal agreement? If not, when do we expect to meet with them? These are the types of things you have to plan well in advance because of all the changes in law so it can properly be put in the synopsis for next year.
Hon. Mr. Webster: No, we have not been in contact yet with the Alaskan officials. However, I will be meeting in either the first or second week in May with some Alaskan officials from that department, at which time that matter will be raised.
Fisheries Management in the amount of $381,000 agreed to
On Wildlife Habitat Canada
Hon. Mr. Webster: This involves two person years. They are term positions: an uplands specialist and a wetlands specialist. That is $142,000. It also involves auxiliary or casual positions with conservation land planning. There is $36,000 listed under Other, of which the large expense is for rental of equipment, $20,000; employee travel throughout the Yukon, $6,000.
Mr. Lang: What are these people going to be doing, and where?
Hon. Mr. Webster: The activity for this program this year will involve looking at various sites throughout the territory for recommendation for habitat improvement in the next three years of our agreement.
Wildlife Habitat Canada in the amount of $179,000 agreed to
Fish and Wildlife in the amount of $4,203,000 agreed to
Chair: Are there any questions on page 307?
On Agriculture
On Director
Director in the amount of $172,000 agreed to
On Program Services
Program Services in the amount of $77,000 agreed to
On Demonstration and Research
Demonstration and Research in the amount of $61,000 agreed to
Chair: Are there any questions on Allotments and Person Year Establishment?
Mr. Lang: We discussed this off and on during the course of the session. Is there anything new taking place this year as far as this area is concerned, that we are not aware of?
Hon. Mr. Webster: There is nothing new being contemplated for this year. This is just an extension of the ongoing programs we have had for a number of years.
Mr. Lang: When will we know whether or not there will be a representative on the Economic and Environmental Council and the Livestock Association?
Hon. Mr. Webster: As you are aware, the Economic Council will be expanded to become the Committee on the Economy and Environment. Over the next two months the makeup of that committee will be established at which time representations from a variety of organizations will be considered.
Mr. Lang: Do you think there should be a representative from this sector of the economy on such a council?
Hon. Mr. Webster: In an effort to keep the size of the committee to a manageable level, I do not think we will be able to ask a representative from each sector of Renewable Resources. We will have to find someone who has expertise, knowledge and experience in a variety of areas associated with renewable resources. When you consider the number of individuals and organizations that should be represented on this expanded council, it would be too much to put one representative for each association in that field.
Mr. Lang: We feel it is important that they are recognized. It is a developing area and is one that the government keeps telling us is a high priority. We feel they would have something to contribute. It would be very difficult to find someone with a background in trapping and at the same time have a fair knowledge of agriculture. I would be very surprised if you found someone with that varied and broad background. We feel they should all be represented.
Agriculture in the amount of $310,000 agreed to
On Inuvialuit Final Agreement
Chair: Is there any general debate on IFA?
Mr. Lang: I was up to Herschel Island and at that time there were quite a number of coffins exposed by erosion that took place just above where the whalers’ camp is presently situated. Were there steps taken to bury those coffins again and, if so, what took place there?
Hon. Mr. Webster: That information is found under the heritage and tourism branches. I understand that work on the grave sites is ongoing and is going to be done over a two-year period.
Mr. Lang: They are actually exposed. I do not think it is something you leave for years on end. This was three or four years ago. I raised the question in the House two years ago. I put the idea forward that the service could be arranged in conjunction with the Anglican Church in recognition of the work that the church had done with the people on Hershel Island at that time. I gave it to the Minister, and I do not believe he did anything with it. It would be a good move on behalf of the government if some sort of commemorative service was held. These coffins are exposed and laying on the surface. It is just like they are lying on the sidewalk. They should be buried again. It is a sight you always remember, obviously, because I am talking about it.
Steps can be taken. It only takes an initiative to rectify it. It should not turn into a two or three year program; we should not have to start another government agency to oversee it. All we are talking about is digging 10 graves.
Hon. Mr. Webster: I want to thank the Member for the suggestion. I too have been at Herschel Island. I have seen the coffins of which he speaks that have just been pushed up from the moving permafrost in the area. I forget the number of graves that are involved, but to my mind it is considerably more than 10.
Mr. Lang: We are looking at approximately $687,000 to be spent up there and if these people are going to be there, surely we can organize something. Even if it is 15, surely something should be done in respect to doing the proper thing as far as these coffins are concerned. It seems kind of funny talking about it in here. When you actually see it, it is quite a sight to be exposed to. So, I would just like it if the Minister would make the undertaking to see if some instruction could be given. If the people are there, that could be given priority over a lot of other things. It has to be done anyway, so it might as well be done.
Hon. Mr. Webster: Perhaps when we come to debate the tourism budget, which is next on the agenda, I can provide the Member with more information on this matter.
Mr. Lang: I would just like to know what is going to hit him - a bolt of lightning? - between now and the next five minutes? Does he not have his notes with him or not have the answers, or what is the problem?
Hon. Mr. Webster: No, all I am suggesting is that by the time we get to the tourism budget, where this item should properly be, maybe I will have some more information coming forward.
On Policy
Mr. Lang: Maybe the Minister can tell us what he is going to do in this area since we are spending all this money up there and we have so many people traveling up there.
Hon. Mr. Webster: We are going to be undertaking quite a bit in this area under the administration coordination. Beginning next week, with the North Slope three-day conference being held in Dawson City, we will talk about conservation resource management. Some of this money is being funded for the North Slope Wildlife Management Advisory Council, which is looking at big game management plans in that area. A variety of costs associated with personnel are for the Environmental Screening Committee, Environmental Impact Review Committee and the Research Advisory Council.
Policy in the amount of $339,000 agreed to
On Parks
Hon. Mr. Webster: This is in two parts. There is funding for the salary for the restoration planner through the Department of Tourism, and the other personnel costs are associated with administration operating costs of the Herschel Island Park itself.
Mr. Lang: Are there any more plans for Pauline Cove as a year-round port? Have there been any representations made to the government in the last year, and if so, what were they?
Hon. Mr. Webster: Not to my knowledge have there been any proposals put forward.
Parks in the amount of $286,000 agreed to
On Wildlife
Wildlife in the amount of $62,000 agreed to
IFA in the amount of $687,000 agreed to
Chair: Are there any questions on information pages 319 to 321?
Department of Renewable Resources in the amount of $9,510,000 agreed to
Chair: At this time, we will have a brief recess.
Recess
Chair: Committee of the Whole will now come to order.
Department of Tourism
Chair: Is there any general debate?
Hon. Mr. Webster: I am pleased to introduce the Operation and Maintenance Budget for the Department of Tourism. The budget has been increased by a net 12 percent, or $436,000, over the 1988-89 forecast levels. This is a significant increase to the budget and will be almost exclusively concentrated on a substantial enhancement of our tourism marketing activities. Proposed increases will address specific initiatives and priorities identified in the tourism action plan. I will briefly highlight these changes in the budget.
The administration program will increase by a net total of $22,000, representing a five percent increase over 1988-89 forecast levels. The majority of the increase results from salary settlements, and the addition of an auxiliary on-call administration clerk position to provide backup during staff absences.
The heritage program will decrease by a net total of $55,000, representing a nine percent decrease. Two special projects undertaken in 1988-89 will not continue into 1989-90. The secondment of an employee from the Executive Council Office will terminate March 31, 1989. Consulting services for the preparation of historic resources legislation will not be required in 1989-90.
The development program will decrease by a net total of $2,000, representing a less than one percent decrease. The marketing program will increase by a net total of $471,000, representing a 22 percent increase. Personnel costs will increase by $124,000 for merit increases and salary settlements, and for the opening of the SS Tutshi from mid-June to early September.
The Yukon Image advertising campaign, promoting the Yukon as a travel destination in Canadian magazines, will be increased by $78,000 to broaden market coverage and increase inquiries. This is offset by a reduction of $20,000 in miscellaneous other costs, therefore resulting in a net increase of $58,000.
Three activities will increase our transfer payments by $288,000. The contribution to and continued involvement in the Alaska marketing program will be enhanced by $51,000 to enable us to reach an even larger number of prospects. Agreement with the Tourism Industry Association of Yukon has been restructured to ensure adequate funding for the joint convention promotion program and will be increased by $27,000.
Agreement has been reached with British Columbia and Alaska to initiate a new joint tourism marketing program featuring northern BC, the Yukon and Alaska as a tourism destination for independent RV camper vacationers. There is $210,000 to be allotted to this program.
All these increases address priorities and programs identified in the tourism action plan, and will enhance our capacity to continue to optimize the social and economic benefits to be derived from a successful tourism sector. The department’s person year allocation for operation and maintenance will increase by one to a total of 26. This increase results from a conversion of the marketing technician from auxiliary to a three-year term.
Auxiliary positions for the department total 33 of which 26 are for the seasonal staffing of the visitor reception centres. Five are for SS Tutshi tour guides. One is an on-call secretary and one is the on-call administration clerk I referred to.
I would be pleased to answer any questions on this department’s O&M Budget for the coming year.
Mr. Phillips: Last week before I talked to the Minister, I asked him some questions in the House about the possible side effects of the Alaskan oil spill on Yukon tourism. There were a couple of meetings, one is Sitka and one in Anchorage to discuss that specific problem. Did we send anyone to any of those meetings? If not, have we talked to the Alaskan officials on what they see are the problems resulting from the oil spill and if there are any spin-offs? Have we done anything in that regard?
Hon. Mr. Webster: The department itself did not have a representative at that meeting in Sitka. However, the City of Whitehorse does have a seat on that council and had a member in attendance from which we learned about the dimension of the problem and the future course of action.
As you know, on April 17, the governor appointed a task force to meet with Exxon. That task force will be reporting to the Southeast Alaskan Marketing Council. It had a scheduled meeting in Juneau this week of the 26th and the 27th. At that time, our director of marketing for Tourism Yukon, who is a member of that council, will be in attendance. That is the meeting when the recommendations of the task force will be brought forward for discussion by all members involved with the tourism industry in Alaska and the Yukon.
Mr. Phillips: Since I raised the question with the Minister, I have been in touch with Alaskan officials, specifically the Alaska Marketing Council in Anchorage. They met April 18 and discussed the very issue of the Alaska oil spill. Some of the results of that discussion were that they are going to launch a marketing or advertising program in the southern media. One of the areas they are targeting is the Canadian media, such as some of the major newspapers in the major cities, such as Vancouver, as well as the U.S. coast, such as California.
Exxon is paying the shot for all the advertising, and I wonder if we have made any representations to try to tag along, so to speak, in order to get some benefit from this and also to make clear to people that, geographically, Alaska and the Yukon are not the same place.
Hon. Mr. Webster: That is the nature of the discussions that will take place this week at the regional conference in Juneau. We will have a representative there. I am quite certain that the advertising paid for by Exxon will indeed be extended to Canada, and I am sure that our director of marketing will have some good suggestions on how to use that money to that purpose.
Mr. Phillips: I would like to move into another area of concern with respect to tourism and that is the area of the difficulties we have had in the last three or four years with the Alaska Highway closing or any other emergency that could affect Yukon tourism.
Presently, there seems to be an ad hoc approach to responding to, for instance, the slide last year in the Kluane area. Although we responded to the slide in the area, the message that the highway was repaired simply did not get to the RV parks and the campgrounds in southern Canada. Any of the RV park owners that I talked to said that shortly after the slide, the traffic heading north just died completely because the story was that the highway was in too poor shape to travel on.
What I would like to suggest to the Minister is that we strike an emergency response team, of a sort, where we would involve several YTG departments - Tourism, Department of Highways - and that we would have some sort of contingency plan in place, and that there would be a close working relationship between the Department of Highways and the Department of Tourism, to keep them abreast of what the problem is and how soon it is going to be corrected. Then we would also tie it in with local lodges and lodge owners and the BC and Alberta governments down south, to immediately make them aware of the condition of the highway. It is absolutely important to us. You know yourself, Madam Chair, that the minute something bad happens, like a slide, it runs through the RV park faster than anyone can even imagine because everyone tells everyone else and pretty soon everyone ends up turning around and going back. Good news seems to travel a little slower, but we should have in place an emergency response team that could deal with this matter.
Every year we have had various bridges wash out on the highway, where the road has been closed for a week or 10 days, or three or four days, and I think that it would be to our advantage to have some kind of a communications network. The local radio station is fine; we have the tourism radio station, but the difficulty is that, first of all, when people first come to the Yukon, they do not all listen to it because they are not aware of it. The second thing is that most of the people who are turning around are not even reaching the Yukon border and cannot hear the radio. We have to set up a communications network in British Columbia and Alberta to make them aware of the condition of the highway. I think the government should set up some kind of an emergency response team to deal with something like that.
Hon. Mr. Webster: The problem as identified by the Member opposite is one recognized by not only our government, but that of Alaska and British Columbia as well. One of their undertakings in this new joint marketing program that we have, this tripartite agreement, will be exactly to do that: establish a communications network, an interjurisdictional communications network that will alert travellers to potential problems and make them aware of a situation where they may encounter delays and for what length of time. This is something that will be addressed this year under this new program.
Mr. Phillips: I hope that the program is not going to spend all of this year developing a strategy. I would hope that what they are going to do is implement that part of the strategy right away, because that is what is important. We spent a great deal of money advertising Yukon through Expo and other means, and very successfully, I might add, and many of those people who were at Expo and had the opportunity to go through our pavilion are now, in the next three or four years after the fair, taking the opportunity to come north. These are the years that we can lose it. If we have two or three years in a row where we have a slide, or a road closure, we have lost all of those potential people, and like I said, most of those RVers not only spend their summer travelling to the territory but spend a lot of their winter travelling to RV parks in the south. The message is, around the RV parks, that the Alaska Highway is a disaster. We have to counteract that as quickly as possible, and we should be working in those RV parks in the major areas right now, advising people that the highway is in really good condition - well, in as good condition as could be expected, considering the problems in a couple of areas. We should be advising those people right now that the road is passable. That part of the program, the emergency response team, should be in place immediately to deal with any problems that we might face this year.
Hon. Mr. Webster: We have been doing work over this past winter to alleviate some of those unfounded concerns that were expressed by the RV market. This past winter, TIA sponsored a travelling promotion show to RV parks in Arizona and California. There were 65 individual shows in which Chuck Holloway, general manager of the KVA, was involved, among others. They reached 12,000 people. They promoted the highway and informed the travelers that the situation that occurred last year was a bit of an aberration. The road is not that bad. To that end, we put out a special 50-page Yukon highway travelers’ guide that was produced this year for dissemination to those people and approximately 150,000 in the lower 48 states to those who had expressed some interest in driving to Alaska. I appreciate the point raised by the Member for all the fine work we did at Expo promoting this region and now, if something like last year happens again, we could lose the effect of Expo. This is one of the reasons for striking this tripartite agreement.
We are also concerned that if things do not go well this year, it will affect our anniversary celebration in 1992. We recognize there is a need to do more and this program will accomplish that.
Mr. Brewster: I have tried and tried to warn the Department of Transportation that they are going to be in trouble if they do not look at this. The little lake I have in my front yard is the biggest I have had in 40 years. I have had to move my horses out. The snow has not even started to move out of the trees. If we get some rain, as we usually do in June, and good hot weather, we will lose the tourists again because of that road, and we will have more than a problem. We will not have tourists back here for a long long time. The communication in the last year, that everybody says was so good, amounted to what the CBC was picking up from a woman sitting in the Kluane National Park trailer looking across through a telescope and phonning in here. That was what was coming out on the radio. That is not good communication for tourists. It stinks. If we are not prepared this year, we are going to lose that road because we have more snow than we have had for many many years and it has not even started to move yet. It is moving on the flats and down on the road. In my place I have a lake that has not been that big in 40 years. In fact it is within 25 feet of my house right now and is still coming up. The mountains have not even been touched yet.
Chair: Is there any further general debate?
Mr. Brewster: I thank you for your legislative return. I am very very thankful that we do not have another park coming in there. We have enough parks and we better get some place that tourists can get to instead of shoving them off.
I am curious as to why this government is spending $2,500 to take pictures of the glaciers, I presume, and once more going to put out false advertising that this is the Yukon that the average person never sees. I am curious to hear what the answer would be this time.
Hon. Mr. Webster: The intention of this photo shoot was to take an aerial view of the Donjek valley to show people what was available for them to hike in to, and apparently, in the end, the money was not required.
Mr. Brewster: I realize that the money was not spent, but I am curious as to why the Minister started off this way anyway. I do not think people seem to realize that National Parks said that 3,000 people went in there last year. Then they turn around and tell you that less than 10 percent of these people that think they are in the national park are in the Kluane Game Sanctuary and yet we continually, in our booklets, are showing all the beautiful national park. This is false advertising, because none of these people get there and, if you are spending more money to put this in your booklets, it is false advertising. I think we had better show people what they can actually see. There are many many people. All you have to do is go to the tourist information bureau at Beaver Creek or go to Kluane National Park and see the complaints that people put down about the false advertising; that they saw all these beautiful glaciers and such things and they cannot get within 50 miles of them.
Hon. Mr. Webster: I know the Member has raised these concerns in the past. My only response is that if people have enough money and they are willing to fly over the glaciers, I guess the pictures that we show in our pretty tourism brochures would indicate what they can see, if they are willing to go to that extent.
Mr. Brewster: The only thing that I can say to this is that the average ones to come up in their RVs and the rubber-wheeled trade, which is our trade, spend $411 per day. Now, the few that can afford to fly one of those airplanes or a helicopter at $500 per hour are very very few, but if you kept them there where they could get a little ways in and see some of this, they would be spending another day, and that would amount to $822 per day instead of going right through. We keep talking about the people with all the money. The average person who comes up here is not a rich person. They are bringing their families and they do not mind spending a little money, but they certainly cannot be hiring helicopters at $500 per hour to fly in to see one of these glaciers. Why are we not truthful? We have lots of beautiful country to show. Why do we not show this in our booklets? This is what they are going to see when they go up the road, not the big glaciers that nobody can see from the road. Why do we not just show them what they can see and be truthful about it? Tourists are not dumb. They are catching on to this and they are very upset about this type of advertising.
Hon. Mr. Webster: I would imagine that a lot of the scenes of spectacular beauty of the territory, pictures that we put in our brochures, are accessible to the tourists. I think you will always have a few situations where you picked an outstanding feature. Sure, it is in the middle of nowhere, and I am not just particularly focusing on Kluane National Park. How many people get to Herschel? There you have something very unique. Just take a look at the scene of Pauline Cove and the whalers’ buildings, or the grave sites. Realistically, we have 300 people annually who can afford the time and the money to get there, but they are interested in seeing a picture of it.
Mr. Brewster: You bring up Hershel. That is completely different. You do not pay for that; it is in the land claims agreement and the money is sent from Ottawa. If you were spending all our money, we would be screaming and hollering. That money is sent directly from Ottawa to do that. The other is in here. National Parks is creating a crime when they advertise this way, then you turn around and follow. All your brochures show things that are not seen by the average tourist.
Mr. Phillips: We have 300 people who get an opportunity to see the park. We have about another 300,000 who drive by and do not even know it is there. That is what the Member for Kluane is talking about. If we could keep some of those people there an extra day, it would be a great benefit to the Kluane region. I am sure the Minister appreciates that Dawson City is not the only beautiful area of the Yukon, and we should be attempting to diversify our tourism industry and have tourists stay and visit both areas, if possible. Right now, they are not doing that. The plans we see laid out by this government do not allow people to do that. On the new brochure, there is still only a short half-day or lunch-time visit to look at the Kluane Park slide show, which really is the only thing available to people. Unless you are physically fit or very wealthy, you can see very little of Kluane Park other than the slide show.
What is the government’s position on Kluane Park? The government said it would make this position available to us. The Minister reversed his initial position. He once thought there should be access to the park. He has now changed his mind. He said the government was putting together a position. When can we see that position? Will it be made public in the near future?
Hon. Mr. Webster: Before I respond, I would like to address the position put forward by the previous speaker about the average tourist.
In a general sense, we have to show something of the territory that goes beyond appealing to just the average tourist. I firmly believe that we have to appeal to those 300 people who will visit our first territorial park at Herschel Island as well. I think it is important that we do have a picture of Pauline Cove. Those people spend a lot more money than your RV traveler. There is a growing number of people who are looking for that kind of experience, flying into the Firth going down and spending some time at Herschel. One or two pictures in a brochure of things the average person will not get to is not harmful, as long as it appeals to that elite market.
With respect to a position on Kluane National Park, an option paper has been prepared by the Department of Renewable Resources and the Department of Tourism. This paper will first be reviewed by the Cabinet Committee on Economic Policy. It will then be sent to the Cabinet for review and final recommendation. Following that, it will be printed. I anticipate that our position on access to and into Kluane Park will be released in mid-June. That will, of course, first be submitted to Environment Canada.
As I already indicated to the Members, at that time we will be making that submission public.
Mr. Brewster: I had asked another question on whether the National Parks had ever approached you to take over the rest of the Kluane Game Sanctuary and make it a national park. You have not given me a written answer on that. Do you plan to?
Hon. Mr. Webster: Yes, it is my intention to provide a legislative return to the Member on that question.
Mr. Brewster: Was there ever a discussion that the Yukon territorial people in the tourist bureau office at Kluane National Park change uniforms to be the same as the national parks uniforms? Was that ever suggested at all?
Hon. Mr. Webster: Not to my knowledge, but I will research that as well and provide the Member with the information.
On Administration
On Operations
Operations in the amount of $471,000 agreed to
Administration in the amount of $471,000 agreed to
On Heritage
On Operations
Operations in the amount of $189,000 agreed to
On Museums
Museums in the amount of $196,000 agreed to
On Historic Sites
Mr. Phillips: Is this the area where the Minister was going to provide us with information about the grave sites on Herschel Island?
Hon. Mr. Webster: Yes. There are four grave sites on Herschel Island. The one for the RCMP has two graves. That has been restored. The headstones have been put in place. There is one for the whalers, which has been restored, and is in fine shape. There are two other grave sites, and they are the Inuvialuit’s responsibility. There are between 150 and 200 graves in that area. As I indicated earlier, the terrain is pretty rough there. Most of the coffins have been forced to the surface. We are not in a position to restore those two grave sites. We have not been approached by the Inuvialuit, either, to do any restoration work.
Mr. Lang: Do the Inuvialuit ever go onto the island?
Hon. Mr. Webster: I do not know whether the Inuvialuit go onto the island so much these days, but at one time they did in great numbers.
Mr. Lang: Somebody should get the graves properly tended. Since we only have dead Inuvialuit there, perhaps the Minister could approach the Inuvialuit corporation, or whomever, and see whether some cooperative effort could be made to see that the sites are properly taken care of.
Hon. Mr. Webster: Apparently there have been some discussions on the matter but we have not been approached by the Inuvialuit to actively pursue it. Again, this is no small undertaking; where do you start? It is not the same situation as the RCMP and the whalers’ grave sites, which are not in the same area. We are talking about an area where you have permafrost, and it really is not very economically feasible to do much restoration work on those two grave sites.
Mr. Lang: I am not recommending that we put in a slot machine to make a profit out of this. I am just saying that these graves or coffins have human bones in them and are sitting up near the surface of the ground. Someone should just take a shovel and see that they get covered. I am not asking for a temple to be built, just some very basic work. I am not looking for a pay-back operation. We are spending almost a million dollars up in that area. Surely we can arrange something to take care of those exposed graves.
Hon. Mr. Webster: I want to thank the Member for his representations. It is very timely in that, even though they have been there for some 90 years now. I will raise the matter with the Inuvialuit Regional Council members at the convention in Dawson City next week.
Mr. Lang: I will let the sarcasm go by. There should be something done. If you check the record you will see I debated the previous Minister of Tourism on this. I think in deference to our past they should be taken care of properly. That is all.
Hon. Mr. Webster: Sarcasm was not intended. When we get some direction from the Inuvialuit about restoration work on their grave sites I think we will be in a position to entertain the possibility of some work. I will raise it with the members of the Inuvialuit Regional Council next week.
Historic Sites in the amount of $78,000 agreed to
On Art Gallery
Mr. Phillips: I wonder if the Minister could tell us what this is all about?
Hon. Mr. Webster: This program is to ensure the preservation and maintenance of a representative sample of contemporary art works displaying Yukon artists’ talents. The cost here for personnel is $56,000, which is one person year. Other costs total $12,000.
Art Gallery in the amount of $69,000 agreed to
Heritage in the amount of $532,000 agreed to
On Development
On Operations
Mr. Phillips: Can the Minister tell us if there has been any change in the status of the Tourism EDA Agreement, where $2 million is waiting to lapse?
Hon. Mr. Webster: There is no change in the status of the EDA Agreement and we have been notified by Ottawa that there will be no change in status until the federal budget is tabled later this week.
Operations in the amount of $399,000 agreed to
Chair: Are there any questions on Allotment or Person Year Establishment?
Development in the amount of $399,000 agreed to
On Marketing
Mr. Phillips: Earlier, when we dealt with the Tourism budget, I mentioned the idea of a Made-in-Yukon catalogue. Has anything been done on that? Has the department looked into the one that Alaska is producing? Can we plan on looking at a Made-in-Yukon catalogue in the future that could enhance tourism in the territory? Locally-made products could be advertised in this catalogue. Has the Minister looked into it?
Hon. Mr. Webster: The Department of Economic Development is looking at the possibility of issuing such a catalogue. It would require the cooperation of the members of the TIA in the Yukon and this is one item that will be discussed at their annual meeting next week.
Mr. Phillips: I realize it is the Department of Economic Development, but it is a tourism-oriented project. The tourism branch, with its expertise on how to market with the right publications should be working very closely with the Department of Economic Development to put this kind of catalogue together.
Hon. Mr. Webster: Our department fully expects to be involved in putting the product together and working with the TIA members.
On Operations
Operations in the amount of $744,000 agreed to
On Public Relations
Public Relations in the amount of $83,000 agreed to
On Promotions
Mr. Phillips: That is a 58 percent increase. What has the department planned for this year?
Hon. Mr. Webster: The reason for the large increase here is the transfer payments: $51,000 has gone to the Alaska Tourism Marketing Council - that is an increase of that much; $27,000 in additional monies will be going to the TIA convention program agreement; and, as I mentioned earlier, $210,000 will be put toward the cooperative marketing agreement with Alaska and British Columbia.
Promotion sin the amount of $711,000 agreed to
On Information Services
Information Services in the amount of $1,103,000 agreed to
Marketing in the amount of $2,641,000 agreed to
Mr. Phillips: Before we leave Tourism, could the Minister tell us whether or not the Yukon government put any more money into the MV Anna Maria project, getting her from Skagway to Whitehorse?
Hon. Mr. Webster: No additional funds were committed to that project from the Tourism department. I understand they had some assistance from the Department of Community and Transportation Services in the move from Skagway to Whitehorse.
Department of Tourism in the amount of $4,043,000 agreed to
Women’s Directorate
Chair: Is there any general debate?
Hon. Ms. Joe: The 1989-90 Operation and Maintenance Main Estimates for the Women’s Directorate total $319,000, which represents a 13 percent increase over the 1988-89 Main Estimates. Apart from the annual increase in salaries and benefits, there have some been slight increases under the public information policy and program development.
The major new initiative for the Directorate is in the area of family violence. This initiative accounts for the major increase of $65,000. The breakdown is as follows: $5,000 for contracting with a nongovernment agency to operate a Yukon-wide toll-free, 24-hour help line for family and community violence; an additional $5,000 will be used for training persons operating this help line; another $50,000 will be used for public service advertising on family violence; and, $40,000 to produce posters, pamphlets, videos, and information booklets on community and family violence.
The family violence initiative is being coordinated with other government departments: Justice, Health and Human Resources. The Yukon Advisory Council on Women’s Issues will receive $52,000 for travel expenses, honoraria and research. This year, the budget for the council has increased by $8,000 for administrative support.
The amount of work generated by the council necessitates increased administrative support, as it has become more difficult for the Directorate to continue to provide this.
Needless to say, we all have been extremely pleased with the council’s actions in advancing the status of Yukon women. The budget continues to reflect the Directorate’s continued commitment of increasing the participation of women in the decision-making process. The amount of $4,600 has been budgeted to continue the advertising of the talent bank, a career fair for young women, and the most recent publication, the “Employment Law Handbook: A Yukoner’s Guide to Understanding Employment Law.” This follows the very successful employment handbook, “How to Find a Job,” of which 2,000 copies were distributed throughout the Yukon and to agencies across Canada that sent in requests. An additional 2,000 copies were printed and continue to be distributed. The Directorate is confident that the “Employment Law Handbook: A Yukoner’s Guide to Understanding Employment Law,” of which 4,000 copies were printed, will be as successful.
Women on Wheels, an outreach project, is ongoing and has minimal funding of $600 and is a very effective tool for increasing the awareness of women’s issues in communities outside of Whitehorse. The Directorate continues to work in cooperation with other government departments and nongovernment agencies to effect change for Yukon women. To follow up on the Women Entrepreneur Study, jointly sponsored by the Department of Economic Development and the Directorate, a one-day conference, “Make the Connection,’ linking women and businesses was held April 1.
The conference was a success with 100 delegates in attendance and 130 more women on a waiting list. Recommendations have come out of this workshop. The Directorate and the Department of Economic Development are prepared to continue support to Yukon women in business in pursuing further action. Already this initiative has served as a catalyst for 40 women entrepreneurs in Dawson to meet April 30 for their first business meeting.
Furthermore, $5,000 is to be used to develop Yukon material on career choices for young women. This initiative will follow the strategy of the national public awareness campaign and the occupational integration of women. Another $2,000 will go toward the continued updating of the resource library and the training of a secretary on library methodology. A further commitment of the Directorate in working with other jurisdictions on issues affecting Canadian women. Approximately $6,000 is used to attend federal, provincial, territorial meetings.
Three major items are being dealt with this year. The first is the continuation of the implementation of the labour force strategy as endorsed by the first Ministers’ work, and family responsibilities is identified as a major initiative in the labour force and in education. The second item is in dealing with education following the first joint meeting of Ministers of Education and Ministers responsible. The third is native women and economic development.
This year, $2,600 is set aside for involvement in a conference on northern women, the theme being “Making Connections.” This conference, sponsored by the Canadian Research Institute for the advancement of women, will be held in Yellowknife.
The Directorate continues to give financial support to women’s groups that work toward raising the status of women. This year, transfer payments will go toward the Yukon Advisory Council Women’s Issues in the amount of $18,000 - an increase of $8,000 - with the remaining $8,000 going toward workshops and annual meetings held by women’s groups.
The Directorate is now in the process of developing criteria for funding purposes as more groups are applying for funds. I would once again like to commend the Women’s Directorate on its continual research for Yukon women. I am also pleased with the continued assistance to, and working jointly with, other departments to further the advancement of Yukon women.
Mr. Phelps: I would just like to explore a couple of areas with the Minister that are of some concern. I guess the first area has to do with the positive employment program itself and the relationship between the Women’s Directorate and the positive employment group. Is there any working relationship between the two branches of government?
Hon. Ms. Joe: There is continued consultation with the Women’s Directorate in regard to positive employment.
Mr. Phelps: Which of the two would take the lead role in trying to ensure that this government shows more openness to equality for women within the civil service and, in particular, with trying to pave the way for more appointments to higher managerial levels within the government in general?
Hon. Ms. Joe: The Women’s Directorate is involved in the group of women in management and they have been meeting regularly for the last few months. Those meetings go hand in hand with what is happening with the Public Service Commission in regard to the positive employment program.
Mr. Phelps: Is there any special training or any kind of targets that have been established by that group or by positive employment in regard to trying to get women into more managerial positions in government?
Hon. Ms. Joe: There is a project right now that is being started and the Women’s Directorate continue to make the other departments aware that there is a move toward getting more women into management. That is an ongoing effort.
Mr. Phelps: Do I take it the issue of some targets for more women in managerial positions in the government has not been addressed yet by government through positive employment or elsewhere?
Hon. Ms. Joe: It is being addressed on an informal basis at this point. We are looking at developing a policy that will tell us how we would go about it. That issue is being informally reviewed at many meetings. I hope there will be a lot of input from women involved. The women in management are aware of the issue and continue to bring it up at our meetings. I am hoping we will have something in place very soon.
Mr. Phelps: Is it felt that either the Women’s Directorate or the positive employment group under PSC will be coming forward with some kind of definitive policy on this issue to make sure that there is more equality in regard to women achieving higher management positions in government?
Hon. Ms. Joe: There has been some work done in regard to that area. We have some internal working documents that are being used right now. They are not formal at this point, but they give us a general idea about what it is we are looking for and the type of things we have to do toward getting more women in the management field.
Mr. Phelps: One of the criticisms I have received of some of the government training programs is that there seems to be no real attempt to ensure that women get into the training programs that take them from junior management up the ladder. More often than not, the system ends up with the result that even fewer women than is representative of the people in management get on these training programs.
I feel the Women’s Directorate, in conjunction with positive employment, ought to encourage and support them in trying to open up more training to ensure a better equality at the management levels. I know I have received complaints, and it seems that the more senior than the very junior ranks are getting the meaningful training opportunities. Also, it seems there is difficulty getting young management women into those training procedures. That is one thing in which I would like to see more of a proactive stance taken by the Directorate.
Hon. Ms. Joe: I can assure the Member that that it is a priority. We have had discussions regarding this area. It is on the top of my priority list as the Minister responsible for the Public Service Commission. I have had discussions with my department and my deputy minister. I have had discussions with the Women’s Directorate. It is definitely a high priority. Departments have to be aware that there is this move toward that. Departments, in the past, have been slowly working toward it. Women in acting positions have become directors other than acting directors. Sometimes training or courses are provided.
Mr. Phelps: I want to be on record that we support you in the training, particularly. That is one avenue that ensures equality, at the senior level especially.
What has the experience been with the Yukon-wide, toll-free line for family violence? When is it expected to be in effect?
Hon. Ms. Joe: We are hoping that the toll-free line will be in effect by June 1. We must work out the business of operating it through the different departments involved. There is also another line called a crisis line that could or could not be doing the same kind of work. They are concentrating in other areas as well. We are hoping that it will be in effect by June 1.
Mr. Phelps: Can you tell us about the preparation of the communities for this service? How are you going to get the word out once it is in effect to the potential victims of family violence who will know about it and feel comfortable using it.
Hon. Ms. Joe: Other departments have been involved in dealing with family violence. The word will get out by way of advertising and word-of-mouth. We have departments in almost all of our communities that would provide that information. The RCMP would have that information. We would ensure that the information would get out to whoever needs it, so that people affected would have it.
Mr. Phelps: A problem in communities like Carcross, where this kind of thing occurs, is that a lot of people are unhappy about going to people in authority, like the RCMP, unless it is really out of hand. I recommend a personal approach to, particularly, the Indian band and any families that have had difficulties in the past, so that all members will feel comfortable phoning that number.
It is suspected that in Carcross, and Yukon wide, that the reported incidents of family violence are far fewer than what actually occurs. A special effort should be made to try and make the potential clientele comfortable about phoning the number without feeling that they are talking to officials or bringing in officers.
Hon. Ms. Joe: If there is some way we can make it a lot easier for victims to take advantage of this, we certainly will. We will consider the comments made by the Member.
Mr. Phelps: With respect to some of the numbers on your statistics page, the Advisory Council on Women’s Issues Annual Report shows there were only 100 copies. I am surprised there is not more demand than that for that report. That is on page 353. Are those sent out to the libraries in the communities and given some distribution?
Hon. Ms. Joe: The Advisory Council on Women’s Issues decided that that was to be the number of reports. The reports were sent out to advisory committees in other jurisdictions in Canada. I believe 100 copies probably were not enough.
Mr. Phelps: I found it an interesting publication. The issues they are discussing and dealing with can be found throughout the Yukon.
On Public Information, Policy and Program Development
On Policy and Program Development
Policy and Program Development in the amount of $301,000 agreed to
On Public Information
Mr. Phelps: Why did that drop $18,000?
Hon. Ms. Joe: I apologize. I do not have that information with me. I am not sure. I could make up a story, but I would probably be wrong. I imagine it would have to do with the kind of publications we have out right now and that are going to be necessary. I will have to bring that information back.
Mr. Phelps: I will clear it. I anticipate getting a response tonight on the record.
Public Information in the amount of $18,000 agreed to
Chair: Are there any questions on Allotments or Person Year establishments?
Mr. Phelps: Why is there a 44 percent increase in transfer payments?
Hon. Ms. Joe: That was for funding that went to the advisory council. We found the Women’s Directorate was spending a lot of time doing the work that was necessary for them to do the things they were doing. That has been allocated to them.
Public Information, Policy and Program Development in the amount of $319,000 agreed to
Women’s Directorate in the amount of $319,000 agreed to
Chair: Is it the wish of the Committee to recess before we go into Yukon Housing Corporation?
Hon. Mr. McDonald: That appears acceptable. By agreement between House Leaders, we will be dealing with the Yukon Development Corporation at 7:30 p.m.
Chair: We will recess until 7:30 p.m.
Recess
Chair: Committee of the Whole will now come to order.
Ms. Hayden: I hope the Members will join me in welcoming to the House, 13 Guides and their leaders, Therese Lacroix and Yvette Sormany-Albert from le premier compagne Guide de Whitehorse, the first French Guide company in Whitehorse.
Chair: We will be continuing with Bill No. 51. We will now proceed to the estimates of the Yukon Development Corporation. Pursuant to Standing Order 48(1), Mr. Penikett has filed the appropriate certificates to have witnesses appear at the bar of the House. Is the Committee agreed?
Some Hon. Members: Agreed.
Yukon Development Corporation
Hon. Mr. Penikett: Bon soir, Madame President. Bienvenu.
As the witnesses are moving to their places at the witness table, I would like to introduce them to the Members of the House. Since they are submitting themselves to the tender mercies of the Members of this Assembly, I thought I should properly introduce them in case they are not well known to all Members.
Witnesses introduced
The group of witnesses is led by Mr. David Joe, who is the chair of the Yukon Development Corporation and has been since its creation as a corporation in December, 1986. As I am sure all Members know, Mr. Joe is a lawyer, who is a graduate of UBC and was the chief negotiator for the Council for Yukon Indians for a number of years and is in general practice here in Whitehorse.
Another director of the corporation is Mr. Charles Sanderson, who is the deputy minister of Finance and, as well, has been a member of the Yukon Development Corporation’s board since December 1986. Mr. Sanderson has degrees in law and commerce, and previously worked with a multinational pulp and paper firm on new projects.
Another director of the corporation and executive director of the Yukon Development Corporation from December 1986 to March 1989, and the chief administrative officer of the corporation during the period of interest to Members of the House, is Mr. Shakir Alwarid. Mr. Alwarid is a public servant of long standing and has undergraduate and graduate degrees in economics.
To assist in the deliberations tonight, especially discussions of the transactions involved in the sale, I would also like to circulate to Members a document that describes the steps and, in a flow chart, the legal transactions involving the sale of Hyland Forest Products to its new owners.
With that, I would like to resume my seat. The matter before us has been much debated in the House. The appearance of the witnesses tonight arises from a commitment I made to the Members opposite, I believe, during Question Period, that they would, at the time of discussion of the Yukon Development Corporation line in the estimates, have officials of the corporation here to discuss the operations of Hyland Forest Products during the period it was under our ownership.
As is the custom on such matters, I will be here as the Minister responsible to answer any questions about government policy. Questions about the administration of the corporation I will of course refer to the witnesses.
In the first instance, I will do that in any case for Mr. Joe, who is chairman of the board. The witnesses themselves, though, if appropriate, will decide among themselves who is best suited to answer the particular question.
Chair: At this time I would like to remind Members that questions are to go through Mr. Penikett to the witnesses. As well, I would like to remind both the Members and the witnesses to address their remarks through the Chair.
Mr. Phelps: I would like to begin by welcoming the witnesses to the Chambers, and I am certainly impressed with the credentials as outlined by the Government Leader. With two lawyers, degrees in economics and a fellow graduate of UBC, it is hard to believe that the operation lost any money at all.
We have received a documentation at the eleventh hour - on the court room steps, we used to say. Of course, we have not had much of a chance to go through it. They describe the steps taken in the sale itself.
Not having perused that very carefully, I wanted to begin with the legislative return filed by the Government Leader this afternoon in the House. That return described certain documents that were registered. We have obtained copies of those documents which are, of course, in the public domain.
I would like an undertaking from the Government Leader to provide me with a written list of the other documents, whichever ones exist that are not mentioned in the legislative return and which relate to the sale itself so that I will know, by just a rough description, which documents are not in the public domain.
Hon. Mr. Penikett: I take it that the Leader of the Official Opposition is, in fact, asking for a list of those documents that would be covered by the conventions under commercial confidences, that he is not asking for the documents, but asking for a list of those so he can know what is, in fact, not accessible at this moment.
Mr. Phelps: That is correct.
Hon. Mr. Penikett: It will be my undertaking to make best efforts to obtain those expeditiously.
Mr. Phelps: What I want to do in my questioning in sort of general terms this evening is to have a look at the Hyland mill operation in general terms from its inception, so I do not want to get bogged down too much. I want to kind of have an overview of what happened, and some of the things that occurred in a summary sort of way. In doing that, I will be asking some questions that are really based on the report that was made public back at the time the mill was first purchased. That report is done by Deloitte, Haskins and Sells Associates. In the Government of Yukon it is called “Report on the Watson Lake Sawmill.”
In going back to when the negotiations were taking place, first of all there was, as we know, a bit of a bidding war going on with the receiver in the court of the Yukon Territory a couple of years back. In that bidding war, there was another small business involved, called Kingsgate Forest Products. I understand that, finally in that process, Kingsgate backed out and the quid pro quo was an agreement structured by the Yukon Development Corporation or the Department of Economic Development, entered into on behalf of government by one of the witnesses here today.
I understand that agreement was that Kingsgate was guaranteed certain business in terms of logging on behalf of the lumber company. Could we perhaps just have a brief explanation of what that deal was with Kingsgate - exactly what it was they received - in return for backing out of the deal?
Mr. Alwarid: There was the other bidder. We placed the two bids in a sealed envelope to be called when the bids were opened. They asked their lawyer to ask the Judge of the Supreme Court to give them another opportunity to reconsider their bid. They asked for another two or three hours to reconsider. Their position to us was that they were entering a bidding war. There was no bidding war, because there was only one bid placed. The Yukon-based partner of Kingsgate, namely Colorado Resources, did tell us their interest was to obtain contracts for logging. Their interest was specifically related to one block in northern BC, and they wanted us to give them a commitment allowing them to log that area because they were familiar with that area and they wanted to generate some business. We agreed to that position. We gave them a commitment to utilize them to do logging for us at market prices. They did not get any preferential treatment in terms of prices. The same conditions that apply to any logging company were obtained, i.e. good logging practices and environmental conditions, et cetera.
Mr. Phelps: As a result of that agreement, we understand that Kingsgate did do logging on behalf of YDC. How many seasons did they log?
Mr. Alwarid: My recollection is that they did it for one season. They may have had to do some clean up after that season, but it was a small amount. It was something in the neighbourhood of three million foot board measure.
Mr. Phelps: Was their performance satisfactory?
Mr. Alwarid: If I remember, there were some questions about logging practices. I remember there were 10 or 15 percent holdbacks, and they were required to go back and do the work that was required by the forestry people.
Mr. Phelps: Moving on from that - the announcements were made in the public domain and various figures were given. We had various figures in the consultant’s report. Could we be told tonight what, at the outset, was seen as the necessary capital cost in getting involved and getting the mill running? Just give us some figures. We have figures in various press releases of the day. For example, in Yukon Info of January/February 1987, the financing was estimated at $1.4 million. We have, in the report itself, a start-up cost estimate of $1,060,000. We have another estimate in the same report in the executive summary showing fixed asset and start-up costs of $2.1 million - depending on the alternatives - and as high as $2.9 million.
What was the target for the capital and start-up costs? What was the figure that was made public? Was there a firm figure in mind at that time?
Mr. Alwarid: I cannot recall the exact figures. There were different numbers. The Deloitte report was done sometime in October or November. There was a foot or two of snow over the equipment and the yard. Those figures, which were part of the realization of the operation, proved to be incorrect in many places. The numbers estimated for staff costs were inaccurate, for example, there was a minimal amount for required work for the power house.
These proved to be wrong. We cannot go by those numbers. We were confident that we obtained the best advice possible with the Deloitte reputation and the team assigned to it. They did qualify that these were estimates based on what they could see and investigate first hand. Each component required further analysis and further engineering work to verify the amount of work required and the cost. In all cases, their estimates were proved to be wrong.
Mr. Phelps: I appreciate the answers given. There came a point in time when it was all systems go and the announcement was made that the Watson Lake Forest Products was to reopen. At that point, in early 1987, what figures was the decision based on? If we cannot receive them tonight, could we be given the actual capital start-up costs? There must have been a firm figure at the time the decision was made.
Mr. Alwarid: We could undertake to go back to our files and verify those numbers. The estimates by Deloitte proved to be very optimistic in terms of cost of operations, costs of renovations, costs of supplies and labour costs. Every estimate for all components proved to be very optimistic. The decisions were made on the basis of the Deloitte report, which proved to be incorrect, in many instances.
Mr. Phelps: The figure I would like is the figure in the Deloitte report that was there when the decision itself was triggered. It is not clear from the information in the public domain.
The report devotes a considerable number of pages dealing with a management plan. There is a chapter in the report itself entitled “Management Plan” and a number of important recommendations flow therefrom. Under corporate structure, they state, “we recommend the following basic principles in corporate control of the company’s affairs: the formulation of a corporate plan setting out in general terms the company’s general direction for the foreseeable future. We envisage this plan being continually reviewed, in light of the change in economic climate and emerging business opportunity.”
It goes on to say, “... the annual adoption of a business plan, expressed in physical and financial terms of a three year rolling time frame, in which the first year targets are regarded as firm, the second year subject to review, and the third year is tentative, the preparation of monthly physical targets and financial budgets as a basic financial and management control,” and finally, “monthly reporting by management to the board on significant actual or anticipated events, achievement of targets, variances from budgets, and recommended courses of action.”
So my question would be, first of all, was a corporate plan formulated, and, if so, would the witnesses table that plan?
Mr. Joe: Perhaps I could answer that question. Initially, as I understand it, the question from the Member is whether or not there was a corporate plan that was formulated and subsequently adopted. Yes, there was, and essentially the corporate plan was in a recommendation that was contained in a subsequent study by the person who eventually became the manager of Hyland Forest Products.
Mr. Phelps: I would be interested in whether or not the plan could be provided to us. Was there an annual adoption - of course it only ran for two years - of a business plan expressed in physical and financial terms with a three year rolling time frame? Was that recommendation followed?
Mr. Joe: Yes, that recommendation was indeed followed and we adopted that as part of our corporate plans as well.
Mr. Phelps: Perhaps the Government Leader could tell us if these two plans could be tabled?
Hon. Mr. Penikett: I will take the question under advisement. I see in principle no reason why not but I will check to see if they are in a form that is suitable for tabling.
Mr. Phelps: Then, again, “... the preparation of monthly physical targets and financial budgets as a basic financial management control ...”. I would like to know if that took place and when the first one was prepared and how many were prepared and when the last one was prepared.
Mr. Joe: Yes, that was done as well, but I would have to look at the file regarding when they were done and how often they were done as well.
Mr. Phelps: I would be interested in receiving that information subsequently. Perhaps the Minister responsible can get back to us on that.
The next recommendation was “... monthly reporting by management to the board on significant actual or anticipated events, achievement of targets, variances from budgets, and recommended courses of action ...” Did monthly reporting take place covering all of those issues?
Mr. Joe: Yes, those reporting procedures were adopted, as well. We had monthly reports that were submitted to us on all of those factors.
Mr. Phelps: The next area is financial controls. It recommends a system of internal accounting control, including “clearly defined staff roles, responsibilities and a structured system of reporting and recording of all management information to be implemented.”
In addition, “the following controls are to be instituted and maintained. The first is maintenance of budgets for each month and for the year and adjustments thereto as required by review of actual results reported in the monthly financial statements.” Was that maintenance of budgets for each month and the yearly adjustment done on a monthly basis?
Mr. Joe: Yes. The reports were submitted on a monthly basis. They were reviewed, and I guess the only criteria that was stipulated in the contract that we had with the manager was that any acquisitions or disposals having a value in excess of $50,000 had to be consented to by the Yukon Development Corporation Board.
Mr. Phelps: The other recommendations are: timely preparation of monthly financial statements and their comparison to budget. Was there timely preparation of monthly financial statements in the view of the corporation?
Mr. Alwarid: There were some difficulties encountered by the manager. It took him quite a few months, I believe it was six or seven, before he was able to recruit an accountant to be stationed at the mill who was able to generate the monthly statements with cash flow, profit and loss, production numbers and financial numbers. Once that accountant was inside, those statements were generated.
Mr. Phelps: Another recommendation is: continual monitoring of accounts receivable to control aging accounts and bad debts. The next one is: continual cash flow planning to predict future short-term borrowing requirements and to permit management to curtail or increase discretionary spending as deemed necessary. Were those last two recommendations followed?
Mr. Joe: Yes, they were.
Mr. Phelps: Perhaps we could just stop there for a second with this bunch of recommendations. We will get on to some others in a minute. As I understand it, the first-year audited books were finally completed and transmitted to the Minister responsible in the government. Then, in September, there was a special maneuver, like they sometimes have in Labrador - a bunch of planes flew low over the ground down to Watson Lake with media in them. At that time, September 1988, the losses for the first year of the period ending March 31, 1988 were revealed.
At that time, it was also said that the worst was behind us and there was a secure future. A lot of positive statements were made about how the sawmill was going from the fiscal year-end time until beyond September of 1988.
Given these monthly financial reports, the adjustment monthly, as required by a review of the actual results recorded in the monthly financial statements, the monthly reporting by management, the preparation of monthly physical targets and financial budgets, and the adoption of the business plan, how did the board of directors and the executive director of the Yukon Development Corporation not realize things were going badly in September? The losses were far more in the second year than in the first year.
Mr. Joe: At that point in time, we were going through a management change. On the one hand, we were attempting to get an updated report as often as possible, but, secondly, we were caught between the ability of the management that was in a state of flux to give the degree of accounting that we would have liked at that point in time. There was a bit of a problem in terms of the management turnover, if you could call it that. As a result, the reporting on those matters would reflect that fact.
Mr. Phelps: There was a change in management when Mr. Sigalet left and the new management took over. What happened that these various recommendations were not followed by the new management, with regard to the business plan, the monthly reporting, the monthly physical targets, and the adjusting of the financial forecast on a monthly basis? Were these things not being done from the takeover up to and including September 7?
Mr. Joe: No, those matters were still being followed. Because we were getting a new manager in place, that particular firm adopted a different business plan. To the extent possible, we had problems in ensuring the compatibility of the reporting procedures. They were still in place, though.
Mr. Phelps: From the period of March 31 until the sale was arranged sometime in December or early January, - it was not a full fiscal year but a nine month period - the losses had grown from $1.8 million, which was considered 10 times worse than the first-year scenario in the Deloitte report, up to over $4 million. What information was available to Yukon Development Corporation by early September? Was it apparent, then, that the losses had grown by two and one-half times per month from the monthly reports and all the financial and corporate controls that were in place?
Mr. Alwarid: After the September bid that we were speaking of, we were getting reports on the financial situation. That is the time we had a change in management. The new manager had submitted to us a business plan which predicted better results. He instituted more controls. He instituted changes to the production schemes and the manning requirements of the mill. Between September and December is when he seriously started receiving offers for the sale of Hyland to potential private-sector buyers. We knew of them. The board knew of the them, but it was not time for us in October and November to announce to the world, which is very interested in Hyland, that we are losing money. That is not normal business practice.
Mr. Phelps: I am trying to get a handle on whether the monitoring was at all accurate and on target. I am wondering whether or not, in September, the two and one-half times loss that we are looking at was apparent from the books, that they were losing a lot more money subsequent to March 31 on a monthly basis than they were in the period up to March 31, 1988?
Mr. Alwarid: I will try to answer the question as to whether or not we were aware that the losses were two and one-half times as bad in September as they were as of March 31. That follows shortly after the actual physical change in management when Carroll-Hatch International took over the operation. During the period in question between March and May or June, there was a new business plan developed for the board to view and approve. The business plan definitely indicated better results. The announcement in September was based on bare results forecasts that were submitted to us by our manager, which the board approved. So, there was not any question in our minds, given the expertise we retained and the business plan that was developed that the financial performance would improve over that what was obtained by March 31.
Mr. Phelps: Let me try to give a fair summary of what we are hearing. I gather that what we are hearing is the actual monthly statement showed the losses increase from the previous year that ended March 31, 1988, but that there had been recent management change, and everybody was hoping that the new business plan would make things all better and that the losses would stop fairly soon. That was the reason for the positive-sounding statements emanating under the letterhead of Yukon Development Corporation. Is that right?
Mr. Alwarid: That is right.
Mr. Phelps: Moving on, under management control, again it talks about control through management reporting and it says this: “Financial budgets and quantifiable targets such as board foot output or sales in particular markets will be established and continually monitored in relation to actual results. Variances between actual and target budget will be investigated and, where necessary, corrective action taken by management. Specifically the following controls will be implemented.” There is a long list. Was that procedure gone through and were variances between actual and target budget investigated and corrective action taken by management?
Mr. Joe: Yes. Those reports were given. They were noted and the board was advised of a number of actions so as to correct what was determined to be the source of the problems.
Mr. Phelps: It goes on under management control, “... diligent human resource management ...”, and speaks about the importance of human resource management. The plan called for the recruitment of employees with the requisite skills in their respective functions, special attention to training and safety and the deployment of supervisory skills to ensure a well-motivated and productive work force. Was there special attention to training and safety and can we be told just what was done with regard to the training?
Mr. Joe: I can briefly summarize what we attempted to do with training. Dealing first of all with the agreement between Canada and the Yukon, in particular the Canada/Yukon small business training, in July, 1987 there was an approval of an application for automated office equipment that involved training and accounting for at least two people. The amount that was stipulated was approximately $7,600.
Secondly, under the Challenge ‘88 Program, the Canada/Yukon summer program, funds were approved in the amount of $8150 by the joint committee. Some funds were expended out of that particular program as well.
In terms of the shortage of skill, if I can call it that, there were plans for four positions on power engineering. Six trainees were rotated in the training aspects for this particular program. Of those six trainees, only one successfully completed his fourth class classification. To date approximately $10,000 has been collected in terms of training.
In addition, in the apprenticeship that was set out by the company, we were able to indenture three apprentices, but two were laid off after six months due to a lack of work. I am advised one is still registered under the program. That was our attempt.
Mr. Phelps: I take it then that there were two people who are trained in office equipment. I understand Challenge ‘88 is a student program with minimum wage. One person took the rotating course on engineering and one apprentice is still around. That is the sum total?
Mr. Alwarid: I do not want to leave the impression that there was not training of sufficient quantity. In addition, those were the courses that were offered and training that was funding by cost-shared programs; however, there were at least, that I know of, two courses offered: a lumber grading, which was very critical to quality control, and there were one or two courses offered on first aid. There was a requirement for supervisors to train their own crews. The problem was that the Deloitte report, again, shows a lack of knowledge of local realities. There were not many people who could be hired and trained up front to become a journeyman or an apprentice. The emphasis was on hiring locals, by the manager himself, in training local people, so a lot of training was done by supervisory personnel of the people who reported to them, but where there was a specific trade to be trained in, like lumber grading or first aid or apprenticeship program, those were offered.
Mr. Phelps: I will leave it up to others to judge whether or not special attention was paid to training, on that evidence.
The next recommendation was monitoring of industry trends and it says, “in addition to tight control of the day-to-day operations of the company, management will monitor short term market movements in order to take advantage of specific sales opportunity by maintaining a flexible production schedule. Management will continually evaluate longer-term industry trends in order to advise the board of any potential opportunities or adverse development which might call for adjustments in the corporate plan. The plans calls for the judicious use of computers with a volume of complex data to be processed at once.”
Did the management follow that recommendation?
Mr. Joe: Yes, it did. It was contained within the management contract that we had with the manager, Jack Sigalet.
Mr. Phelps: I assume that there then were reports showing industry trends and what flexibility was possible to accommodate those trends in writing reported to the board?
Mr. Joe: Yes, we did receive marketing reports from the manager on a monthly basis.
Mr. Phelps: I will ask the Minister responsible to take under advisement whether or not those could be produced.
Hon. Mr. Penikett: I wonder if I might, before I accede to the Member’s request, ask him to define the question a little more precisely, and if I might make a short preamble to my response I can try and be more precise about the kind of information to put out.
Between the two managers there was a substantial change in their business plans and their approach to the product and the kind of produce that would be marketed. Therefore, the most significant moment at which the positioning of Hyland’s product in the market, or the attempt to meet certain market niches - I think at the outset, I think I am correct, of the two business plans for the two successive managers - was in fact information from those two sources that the Member is asking for. I think that I can probably readily provide it. If he is asking for information about more subtle shifts in the market, which may not be documented so precisely but may have been communicated either orally or in some other means between the management and the Development Corporation, I am not sure what documentary evidence there may be of some of those subtle evolutions in the market over the time.
Mr. Phelps: Essentially, I guess the whole essence of what we are doing is trying to see whether or not any of these recommendations were followed and to what extent because it is obvious that things went off the rails and totally out of control. We would like to see some of the reports to see how closely the operation was being monitored in accordance with the recommendations.
Hon. Mr. Penikett: I will give an undertaking to respond to the Member’s request but I hope he will understand that I can respond most precisely and most exactly in the sense that the two successive managers had decidedly different views about what kind of product should be produced at the mill and what kind of market could be reached. There was a substantial change in the marketing strategy of the company with the change of managers.
Mr. Phelps: What we are looking at is the monitoring of each manager of their business plan and all the aspects that we have gone through tonight.
During the course, did the actual bookkeepers and accountants change when management changed?
Mr. Joe: No. They did not change.
Mr. Phelps: The recommendations of the consultant then go on to talk about start up. They said the start up plans call for production to start at the beginning of the third month of the first operating year. During the first two months, the plant will be refurbished and all other pre-production tasks undertaken to bring the organization and plant up to operational status. A production rate of 50 percent planned capacity was scheduled for the first month of operation, increasing to 95 percent in December of the first year.
To what extent was the start up plan followed? When did the plant achieve production at a rate of 50 percent plant capacity?
Mr. Alwarid: The Deloitte Haskins report was very optimistic in terms of the shape of the equipment required and the initial capacity of production. The manager who came on site, after hiring the crew, cleaned up the site and took a look at the equipment, relying on senior people. He did develop and submit to us a business plan to the board, which was approved by the board, and that was what was followed. There was quite a variation in terms of production numbers, targets and the scale of operations from the original Deloitte report.
Did we follow the spirit of the report? The answer is yes, of course. One would have to have done this. But in the initial phase one cannot start at full production. One can only slowly bring up production as you are repairing the equipment. So, the intentions of the plan were definitely implemented by the manager.
Mr. Phelps: The start up targets were not met, at least by the recommendations of the report. The report seems to be based on being able to produce and sell 20 million board feet per annum. Can the board tell us how close they came to that goal in the time they were in production?
In other words, how much was produced the first year, and how much was produced the second year?
Mr. Alwarid: I believe the first year production was in the neighbourhood of 10 to 12 million fbm. I do not have the second-year figures handy.
Mr. Phelps: The first year looks more like 50 percent was the maximum achieved. I would be interested in receiving, in due course, the actual output for the second year for the months it was in operation. May I have that undertaking from the Minister?
Hon. Mr. Penikett: I apologize. I do not have that number at my fingertips. I will expedite its delivery to the Member opposite.
Mr. Phelps: We are told about a certain loss level for the operation by the time it closed. These are hived off into what is deemed to be capital and what is deemed to be O&M. It is assumed the capital might be recovered if the sale went through and everything succeeded.
The losses are in excess of $6 million. Will the board agree with me that there were some indirect costs that were not factored in? These would include the silviculture, the replacement of logged-off areas that would be taking place, the Roads to Resources costs that were paid for by government for bridges and haul roads and the costs of advertising and arranging for and the selling of the operation as announced in January and completed in February of this year. Would it be fair to say that those indirect costs are not factored into the loss in excess of $6 million of O&M that is not recoverable?
Mr. Alwarid: The costs for silviculture and road to resources are capitalized. YDC had to contribute to both of those programs. They are capitalized. The amortized portion of those will show in the losses. The cost of arranging for the sale and legal accounting are also reflected in the total cost of the operation.
Mr. Phelps: I am correct then. To the extent that the roads to resources costs are factored into the company’s books, they are the company’s costs, not the Government of Yukon’s costs. In other words, the roads were built for a certain price and there was a cost to the taxpayer.
Hon. Mr. Penikett: That is also true of every mining company that has ever operated in the territory and received benefit under that program. I do not want to get into an argument about who should be showing the cost of the road on an accounting basis. I assume the Member would concede he is making a debatable point, if he is arguing the contribution of this government to programs that are generally available should be counted as a loss for Hyland Forest Products.
Mr. Phelps: Perhaps it is a debatable point, and I am sure we will get into that from time to time with the Minister. I am trying to get at the silviculture program to replace the logged-off areas. That would not be a factor in the figures we have.
Hon. Mr. Penikett: The direct public cost of the government may not be factored in, but we would make no apology at all for having taken the initiative to start the first such program of its kind in the territory. It was a very conscious public policy decision to do that.
Mr. Phelps: Turning to the sale, when was the decision made to sell the mill? By whom was it made? Was it made by the board of directors?
Mr. Joe: As part of the initial mandate that the Yukon Development Corporation received from its owner, the Government of Yukon, we were to sell the operation of Hyland. You could say that, right from day one, it was part of our mandate and we were instructed to seek potential purchasers of the assets of Hyland Forest Products.
Mr. Phelps: My understanding was that the plan initially was to start this operation up and, once it became profitable, to seek out a buyer or partner. That did not happen.
When did the pressure come on to sell? All of a sudden, there was a noticeable desire on the part of the Yukon Development Corporation to find a buyer. In the fall of 1988, were there approaches made to various firms for bids, either competitive bids or proposals to take over the operation?
Mr. Joe: There was no real pressure to sell, per se. The corporation was approached as early as April or May, initially, with proposals to consider the possible sale of Hyland.
Mr. Phelps: When did the main member of the consortium, Shieldings, first communicate its interest to the YDC?
Mr. Joe: I am advised that the initial approach of Shieldings was in October, 1988.
Mr. Phelps: When did the negotiating for the sale commence?
Mr. Joe: The initial discussion the board had was on November 3, 1988. Subsequently, on December 9, 1988 there was the authorization necessary to proceed to negotiations.
Mr. Phelps: At that time were there other companies, consortiums or business interests actively attempting to negotiate a take over of the operation?
Mr. Joe: Yes. I understand there was one other interested party, but from the board’s point of view it did not have the necessary wherewithal to be an effective purchaser of the assets of Hyland.
Mr. Phelps: When the initial negotiations took place was it Shieldings’s idea to take the partners on, namely the Indian consortium and possibly the employees of the corporation, or was that somebody else’s idea?
Mr. Alwarid: Yes. That was their expressed interest. If they were to come and operate in the Yukon they saw their interests go beyond the sawmill operation. They wanted to be a good corporate citizen and expressed their desire to work with community groups, and, if it was possible, with the employees involved in the ownership of the mill itself and involvement for future investments too.
Mr. Phelps: It was Shieldings’s idea to get these other partners involved?
Mr. Alwarid: They did not specifically identify who the individual parties need be, but broadly speaking, they said they would like to participate with community groups and that they could involve the Indian bands as employees.
Hon. Mr. Penikett: If I could just remind the Leader of the Official Opposition that I had mentioned before in the House from the beginning, the government had indicated to the corporation that a mix of national and local ownership would be desirable. In fact if I may refer back to my original ministerial statement, when the announcement that we were preceding with this was made, I did indicate at that time that we would be looking from that moment either for a joint venture arrangement or a mixture of public and private, or community and national, or even the possibility of an arrangement involving employees as a desirable way of getting not only national expertise, but also local ownership in the continuing operation of that mill.
Mr. Phelps: Then I am not clear because I understand from the witnesses that it was the idea of Shieldings, or has that been contradicted by the Minister.
Hon. Mr. Penikett: It is not at all a contradiction. What we are explaining is that there was a community of interest or mutually compatible goals. The previous witness has just indicated that Shieldings indicated their willingness to proceed on that basis, and of course that added to their desirability as a partner. I do not believe anybody, at the outset, contemplated the exact mix of shareholding that we eventually ended up with.
Mr. Phelps: I have one or two more questions and then perhaps we can break and someone else can question. Back to the report and the mill, the report was quite specific about the condition of the mill’s useful life span. Page 12 of the chapter regarding operations talks about when the equipment was installed: scrag mill probably 1967, planer mill probably 1970, and so on. It talks in terms of this kind of machinery having a three to five or eight to 10 year lifespan, depending on whether it is automotive or major machinery. It makes the statement: “The equipment at Watson Lake Sawmill is all beyond its economic life; however, with some significant maintenance expenditure, the equipment can be operated for a short period of time, i.e. up to five years until enough capital is generated to replace the equipment.”
The witnesses have indicated that the report was not entirely reliable in all aspects, and I would suggest that it became pretty apparent pretty quickly that the mill was really not operating very efficiently at all, and it never did. I suggest and ask this question: is it not true that Jack Sigalet wanted to modernize the mill, spend a considerable amount of money making the mill more modern and more efficient, and did he propose this to the executive director and/or to the board of directors?
Mr. Alwarid: I understood the question to be if the manager recommended to us to build a new mill? No, he did not. He definitely did not.
Mr. Phelps: Did the manager recommend modernizing the mill and upgrading and replacing some of the major pieces of equipment, in order to make it more economic?
Mr. Alwarid: Yes, he did, and that was part of his approved business plan, the capital portion of the business plan, which was approved by the board and was to be carried out by him.
Mr. Phelps: Perhaps we could break briefly at this time. I would suggest a short recess so that we could finish this matter by 9:30.
Chair: We will have a break at this point.
Recess
Chair: I will call Committee of the Whole back to order
Mr. Devries: I have some questions regarding the Kingsgate partner. Were the directors aware that the work of Kingsgate was consistently below standard and that the management was told that it could not fire?
Mr. Alwarid: No, we were not told that it was below standard. The management contract was explicit in allowing the manager to carry out all logging responsibilities and inventory supplies. We did not receive daily reports as to the standards of achievement of individual contracts. We have many contractors. It came to our attention when the holdback was not released. The explanation was given that he was below standards because the forestry people insisted on him remedying the situation.
Mr. Devries: I would like to clarify that it was not as much in the bush as the product that was delivered in the yard I was referring to. In order for the company to improve the performance of the contractor it was forced to fine him on below standard loads, basically because there was too much rot in the load’s limbs or too small a diameter garbage mixed in with everything. They were paid by weight according to cubic measure. Was the corporation aware of that?
Mr. Alwarid: There is a scaler at the mill site. That scaler is responsible for verifying the volumes delivered and the amounts deemed to be made. If the delivery was substandard then the payments to the contractor would have been adjusted to reflect that.
Mr. Devries: Was the corporation aware that this company was operating four months past the delivery deadline of May 15 and that Hyland Forest Products accumulated costs up to $2,500 per weekend due to keeping the scaler and loader operator, with loader time?
Mr. Alwarid: Our understanding was that the manager did carry out the contract obligations of Colorado Resources for delivery of his contract obligations. We were not told the specifics as to how the adjustments were made or for what purposes.
Mr. Devries: It was mentioned earlier that this contractor was not awarded another contract the following year. I would like to correct this statement, as he was awarded another contract. This contractor was awarded a contract to build a road known as the Rancheria Loop Road and was subsequently given another logging contract the following logging season. Again, this was on the manager’s recommendations.
Mr. Alwarid: I would like to make two points on that. One is the answer we provided earlier: our obligation was to award that first Colorado Resources, and that was the company that was bidding to own Hyland Forest Products. There was no legal obligations to give him any more contracts. He did bid on subsequent contracts and was awarded the contract, not due to any legal obligation. As any local contractor would, he established an office there and had local employees and was awarded the contract.
Mr. Devries: I would just like to clear up something. I am not making accusations, I would just like the Yukon Development Corporation to be very clear on where money was possibly misspent. The reason I am revealing some of this is so that it does not happen again.
Another contractor spent six weeks last fall cleaning up the mess left by this negligent contractor. I believe earlier it was mentioned that the holdback was never paid. Is it possible this was used to pay this other contractor for cleaning up the mess?
Mr. Alwarid: That was the purpose of the holdback, and that is what it was used for.
Mr. Devries: At what time did the directors of the corporation become aware of the chipper project, begun in late November of 1987?
Mr. Alwarid: We do not recall the exact month and date when we became aware of that item. I believe it was during the visit by the board to the mill site when we discovered that the chipper was built. The manager had requested to build that chipper and he was told that if he could build it with the construction crews that were available at the mill, he could proceed with it, but it was not part of the capital plan nor the capital budget approved by the board.
Mr. Devries: If that was the case, the project was started by the crew that was on site.
Does the corporation have any idea what was paid for the used chipper that was part of this project during the summer of 1987? What was the cost of the chipper project, according to the computer print out, when it was completed?
Mr. Alwarid: As the hon. Member mentioned, it was built by crews who were working in their “off time”, or the time they were not being fully utilized. There were no costs established specifically for the chipper. Hence, we do not have actual numbers as to what it cost the corporation to build that chipper.
Mr. Devries: As I was in purchasing myself, when the project was originally started, just for clarification, the costs were put against the power house, but when the accountant was hired in January, by the end of January there was a cost code put into the computer for the chipper project and all the labour that had been put into it was stuck in there, plus all the parts from that point on. Does the corporation have a figure of what the total cost was under that project number?
Mr. Alwarid: We do not have now, but we could look into it.
Mr. Devries: Does the corporation have any idea what was paid for the used trim saws that were purchased for the planer? Do they have any idea of the total trim saw installation costs, which was again done under a number in the computer?
Mr. Alwarid: The hon. Member should understand that there is a capital plan developed and submitted by the manager. The manager is under legal obligation to operate within his management contract. We did not interfere in his day-to-day operation or month-to-month operation. We did not question his judgment as to how many saws he bought and how much they cost. We did not keep accounting for those saws as long as it was part of his capital plan and, if the question is how much was allocated in the capital plan or the capital budget for purchasing saws, we could find that number, yes.
Mr. Devries: I am not trying to pick on the manager, or anybody. The feeling of several people at the mill at the time was that it was a very poor decision to put those particular trim saws in and that it was at a substantial cost. Does the corporation have any idea what the electrical room for the planer cost, including the equipment, and does it realize that this electrical room still has not been utilized to this day? There is one switch in that electrical room that alone cost between $8,000 and $10,000.
Mr. Alwarid: These detailed numbers on detailed projects were specific projects we do have on the books now on the expenditures on computer print outs and we will be happy to supply to the Member what it cost for that specific project, specific switch gear and what have you.
Mr. Devries: After the fire at Hyland Forest Products in the spring of 1988, I believe it was, how did the corporation decide who tendered this project?
Mr. Alwarid: The fire caused the lay off of quite a large number of people at the mill. I believe something like 60 or 70 people were laid off. There was an absolute urgency that that fire damage be repaired within the soonest possible time. We did ask the engineering firm of Carroll-Hatch International to do the design because the feeling of the previous manager and the previous manager was that the electrical switch gear needed revisions or upgrading. Carroll-Hatch was hired to design the new rebuild and they were asked, specifically, to tender it by invitational tender, putting in the specific requirement that the work had to be finished within, I believe, two or three weeks time. An invitational tender was sent to qualified firms, both in northern BC and in the Vancouver area. The manager then had the right under his contract to choose the firm to be hired. I know we became aware of a local firm that complained that they were not sent an invitation to tender and when we looked into it, there was an oversight and an apology from the engineers that they were not aware that there was a firm that specializes in electrical installations. The point was that we needed a firm that had the expertise, had the experience, had the manpower, and could move in and do it fast.
Mr. Devries: Was this work completed within the deadline they were given?
Mr. Alwarid: I believe there were delays in completing the work. Once they started working, they decided to expand the scope of the work. I cannot remember what the delay was, but I know it was delayed.
Mr. Devries: Regarding the contract outside of the electrical, as far as the cutoff saw was concerned, was that project completed on schedule?
Mr. Alwarid: We were told by the manager that it was.
Mr. Devries: Was the corporation told by the manager the work was satisfactory?
Mr. Alwarid: To the best of my knowledge, we did not receive a complaint that the work was unsatisfactory.
Mr. Devries: I can understand why the manager did not do that, with his own company doing the work.
Was the corporation aware that, several times, there were either fines levied or reinspections ordered in various parts of the country due to poorly graded lumber?
Mr. Alwarid: No, we were not aware of any dissatisfaction with the quality of the lumber. Personally, I have had contacts from grade lumber brokers, who were extremely pleased with the quality of the lumber and offered to do exclusive marketing for Hyland because of the high quality of the lumber produced.
Mr. Devries: People were quite impressed with the quality of the lumber, but often there were times when there was too much poor lumber stuck in with the good, and that is where we had a few problems.
What was the total value of the lumber sales for both years, and what was the volume? In conjunction with that, what was the total volume of logs used to produce this lumber, in an effort to determine the amount of wastage, which went into the burner or into the power house?
Mr. Alwarid: We responded earlier to the question of production volumes and logs used. I do not have those numbers with me. We make a commitment to respond to that, if it is desired.
Mr. Phelps: We anticipate there will be an undertaking to provide us with the actual volume of the logs delivered to the mill in the period the mill was operating. Another figure we would like is the actual finished lumber volume that was produced; the next figure is the actual volume of finished lumber that was sold. Those are the figures Mr. Devries was asking for. I would like the commitment from the Government Leader to have them produced for us later.
Hon. Mr. Penikett: As I understand it, I have previously given an undertaking to come back with most of that information. The form in which the question has just been asked by the Leader of the Official Opposition is simply an elaboration on the previous questions he asked. I will provide the information according to the latest version of the question.
Mr. Phelps: The Minister is partially correct. We have not asked for the total volume of logs purchased by the mill.
Mr. Devries: I have a question regarding the wages paid to Jack Sigalet and possibly Carroll-Hatch for management. It is my understanding from the YDC annual report that Sigalet and associates were getting approximately $65,000 plus a profit share that never developed. My understanding is that Carroll-Hatch was paid $12,000 per month with no profit sharing. A statement had been made by someone that both managers were going to be getting approximately equal pay. Does the corporation have any comment on this?
Mr. Alwarid: Mr. Sigalet’s contract did include a profit-sharing clause in it as was tabled in the 1988 audit statement. He did receive $65,000 in total for his fees. Carroll-Hatch were retained as a firm, not as one individual, but as one whole firm, to provide advice to the corporation on all aspects of the operation from engineering to marketing, equipment, manpower and you name it. Their fee was based on the number of days put in on the job. Their total fee did average higher than what Jack Sigalet received, and that was because of the short-term nature of their contract. They were not in a position to be there on a permanent basis as Jack Sigalet was. The contract was envisioned as a short-term consulting contract, like any other consultant.
Mr. Phelps: Just to clarify that, the second group was there to replace the single person and they were paid far more than twice as much as the original manager and managed to lose two and one-half times as much. Am I correct in that understanding?
Mr. Alwarid: The fee paid to Carroll-Hatch International was higher than Jack Sigalet, and the losses were higher than the first year, yes.
Mr. Devries: Again regarding the managerial position, in this newspaper article I was referring to, it was mentioned that if a manager was absent for any length of time that another person would be put in place. Is this an incorrect quote? Half the time there was no one on the premises and the manager took a month of holidays during the month of December.
Mr. Alwarid: As I said, the contract with Carroll-Hatch paid them on a basis of daily fees. If the need was there for an interim or substitute manager, yes, they would have provided it. However, the manager on site from Carroll-Hatch deemed that the senior personnel from the mill could replace him in his absence, hence, there was no back-up manager. The accountant of the mill and sometimes the production manager acted as general manager in his absence. That saved money and gave him an opportunity to promote.
Mr. Devries: I have no problem with that; it is just the fact that they continued to get paid when they were absent that bothers me.
Chair: Is there further general debate?
Mr. Phelps: I would like to move once again back to the press release of September 7, 1988 and the announcement in Watson Lake of the loss in the previous year that ended in March. The quotation in that press statement says, “Although the $1.8 million loss is significant, most of the loss can be attributed to the cost of getting the mill back into the production. Now that those costs are behind us, the secure outlook for Hyland’s future confirms that buying the mill was a wise investment.”
I am wondering what portion of the $1.8 million loss was attributed to the cost of getting the mill back into production, and if that was O&M loss and not capital loss?
Mr. Alwarid: As I said earlier, the Deloitte, Haskins report was optimistic. The loss of $1.8 million cannot be attributed, on a pro rata basis, saying that this is due to management problems or equipment problems or marketing problems or training. There are a multitude of factors that contributed to that loss and cannot be attributed directly. So much was because of the higher costs.
Mr. Phelps: When did it first become apparent to Yukon Development Corporation that the mill would never be able to achieve the production target necessary to make it a profitable operation, namely, 20 million board feet per annum?
Mr. Alwarid: The question is: when did it become apparent that we could not meet the production target of 20 million? In certain days, certain shifts, certain weeks, we did achieve production targets that reached the 20 million fbm or higher. On a consistent basis, no, it was not reached. You could not reach on a average of, say, 50,000 fbm to give you 100,000 fbm per day to reach the 20 million. It was reached in certain times; most of the time it was not, from the start-up day.
Mr. Phelps: When it became apparent that it could not maintain the kind of volume of production necessary to meet the necessary break-even, or profit level, the Yukon Development Corporation must have examined or inquired into the reasons for the shortfall in the plant’s ability to do much more than 50 percent of what was necessary. When did the Yukon Development Corporation look into all these problems? What did they conclude were the reasons for this severe shortfall in production?
Mr. Alwarid: As I said, the production targets of the Deloitte, Haskins report were over-optimistic, in light of the circumstances, such as the existing machinery, market, labour force and cost factors. The Development Corporation and the Government of Yukon decided to purchase the mill on the basis of that report.
Soon after, we did hire a manager who was competent and highly recommended by at least 20 different firms that were contacted. He developed a business plan, the board adopted it, we operated under that plan without any interference from the board.
Shortly after allowing him the freedom to act and improve the situation, the board and the manager decided it was in the best interest of both parties for a new manager to be hired, that the new manager do a management audit and an analysis of what had to be done in order to improve the situation.
The manager was changed. A new manager was hired who developed a business plan that was optimistic in terms of a turnaround in production and profitability, and the board again approved that business plan and operated under it.
After it became apparent the difficulties were beyond the capabilities of the manager to fulfill the long-term objectives of the government, buyers began approaching us on purchasing the mill, on the basis of the reputation Hyland had received on the quality of its product. That is when the serious efforts began to identify those buyers, their capabilities and their willingness and capacity to meet the objectives of the government.
Mr. Phelps: I would just like to go through that a bit more slowly. First of all, it became apparent quite quickly that the Deloitte report was not realistic in the target of 20 million cubic board feet per year, which was necessary to make the operation profitable.
As I understood from the witness, a plan was developed by the first manager and accepted by the board. What was the production called for in that plan? When was it approved by the board?
Mr. Alwarid: I believe the business plan was submitted to the board sometime in March or April after he had two months or so of actually cutting off some of the renovations on the clean up. I could confirm that and get back.
Mr. Phelps: What was the production target of the plan in order to make the business profitable? If it was not 20 million board feet per year, what was it?
Mr. Alwarid: I know it was lower than what Deloitte had identified as a target.
Mr. Phelps: Was it substantially lower than what Deloitte based its projections on?
Mr. Alwarid: The Deloitte projections were on the basis of a certain manning of some 85 people. The assumptions and wages were not marketplace wages for people working there. There was an assumption of power sales of $600,000 to $700,000, which they assumed wass feasible and did not materialize. They made assumptions about the costs of production. They estimated the costs of logs to be $85 per thousand fbm. Anyone in Watson Lake will tell you that this is extremely low. The price is $100 to $105 per thousand fbm. That would drive that 20 million fbm numbers. All those costs figures were costs of operation and prices for your product. The figures on the business plan of Jack Sigalet were in the neighbourhood of 15 million to 18 million fbm.
Mr. Phelps: It appears apparent that what we are being told is that the Yukon Development Corporation accepted a business plan and proceeded knowing that they were going to lose all kinds of money because the costs were higher and production targets were lower. To me, even being from Carcross, that means a target of large losses at the outset. Is this what we are being told?
Mr. Alwarid: The manager’s original business plan showed a break-even within a period of three or four months, and then to start generating a profit. Even though the cost factors were high, he assumed higher production levels per shift, per man hour in the mill.
Mr. Phelps: We are told the actual production was 10 million or 12 million fbm, and that the Sigalet plan was based on 15 million to 18 million board feet. Is that what we were told?
Mr. Alwarid: Sigalet’s business plan was to produce 15 million fbm, not 20 million fbm, for the first year of operation.
Mr. Phelps: That was not achieved. What was contained in the next manager’s business plan? What was the break-even point of production required on a per annum basis?
Mr. Alwarid: His production levels were to be higher. He envisaged operating two shifts on the saw line and one shift on the planer. I believe his production numbers were in the 20 million fbm to 25 million fbm range.
Mr. Devries: With respect to the production, after the fire and the mill had been revamped, there were many problems with it. It never managed to achieve the production it had prior to the fire, due to poor workmanship. After the new company took over, it was a very short period of time before they discovered several things were terribly out of alignment. They spent four days redesigning some of the equipment a little bit. A week after that, they managed to get more production than we had prior to the fire. I am still very concerned about the workmanship and the workers getting paid for the revamping of the mill after the fire.
How could that place lose $4.5 million in one year? On the average, we have 60 workers. Most of these workers are like the clerks here. They made about $10 an hour. This would only come to $20,000 to $25,000 a year per worker. Even if you average the wage out at $30,000 per worker, with 60 workers on site, the wages only come to $2.5 million at the most. Where could the other $2 million go? During the Carroll-Hatch reign, there were practically no parts purchased. They had all been purchased when Jack Sigalet was there. We had a good inventory of parts. All the shelves are bare now. Where did the other $2.5 million go? Was some of it deferred from the first year of operation, where the actual losses in the first year were exceeding $1.8 million?
If I am coming across unclearly on this, perhaps our lawyer could explain it.
Mr Alwarid: There was a statement earlier that I do not think is fair. You can say all kinds of things about Carroll-Hatch, but they did not do the work of repairing the fire damage. It was an independent firm that was hired by them as outside managers. Actually Jack Sigalet is the guy who hired them.
They also did not get paid when they were not on site. They were only paid when their representative was on site. After the losses, the average number of workers was not 60, it was 95; for a period of time it was over 100. This is people who were actually in the mill.
Mr. Phelps: Those are all the questions that we have, unless you have any questions, Madam Chair. I would ask that they be excused and we take the next step in proceedings this evening.
Chair: The witnesses are excuses.
Witnesses excused
Hon. Mr. Penikett: I move that you report progress on Bill No. 51 and ask the Speaker to resume the Chair.
Motion agreed to
Speaker resumes the Chair
Speaker: I now call the House to order.
May the House have a report from the Chair of Committee of the Whole?
Ms. Kassi: The Committee of the Whole has considered the following bills and directed me to report the same without amendment: Bill No. 37, An Act To Amend The Home Owners’ Grant Act; Bill No 70, An Act To Amend The Insurance Act; Bill No. 79, An Act To Amend The Occupational Health And Safety Act. Further, Committee of the Whole has considered Bill No. 51, First Appropriation Act, 1989-90 and directed me to report progress on same.
Speaker: You have heard the report from the Chair of the Committee of the Whole. Are you agreed?
Some Hon. Members: Agreed.
Speaker: I declare the report carried.
Hon. Mr. McDonald: I move that the House do now adjourn.
Speaker: It has been moved by the hon. Government House Leader that the House do now adjourn.
Motion agreed to
Speaker: This House now stands adjourned until 1:30 p.m. tomorrow.
The House adjourned at 9:30 p.m.
The following Legislative Returns were tabled April 24, 1989:
89-1-78
Photo shoot contract in Kluane Park (Webster)
Oral, Hansard, p. 399
89-1-79
Details of new vehicular traffic bridge at Wolf Creek (Webster)
Oral, Hansard, p. 276
89-1-80
International Biological Program (Webster)
Oral, Hansard, p. 182
89-1-81
University of British Columbia - study areas in Kluane Wildlife Sanctuary (Webster)
Oral, Hansard, p. 295
89-1-82
Land Claims Negotiating Schedule - April 19 to May 31, 1989 (Penikett)
Oral, Hansard, p. 344
89-1-83
Senior citizens medical for driver’s licence - by visiting physician in Haines Junction (Penikett)
Oral, Hansard, p. 172
89-1-84
Yukon Development Corporation sale of Hyland Forest Products - documents registered (Penikett)
Oral, Hansard, p. 337
89-1-85
Native Courtworker Program - move to Law Courts (Byblow)
Oral, Hansard, p. 387